Wealth Beyond Nations - Novus Ordo · PDF fileWealth Beyond Nations 1 ... vehicle manufacturer, enjoys a US$ 32.6 billion annual ... 1 The U.S. consumer market (household final consumption

1Wealth Beyond Nations

An Inquiry into the Nature and Causes of the

Wealth Beyond NationsPrinciples of Global Interdependence

Michael Byrnes & Tamara van Halm

For peer review - version 2

The global economic crisis may not be resolvable by governments or industry—no matter the tools they use. The challenges are so immense, and so compound, that neither any single government nor coalition of governments can rekindle and sustain an economy for global consumers. This thesis explores why the

powers and tools of government can only be reactive to the crisis, rather than proactive—and thus, will inevitably fail.

Our affluent society in the 21st Century is built upon the foundations of three types of economies: natural resources, manufacturing, and services (72 percent of the world’s output is now in services). It is in this consumer-centric services paradigm which we now stagnate. We stagnate because we do not evolve. But we also stagnate because nearly all of the economic doctrines by which we abide are simply misunderstood and outdated. Our failure to evolve is the true reason we are now in crisis. Bank bail-outs, austerity measures, and increased government spending—these are merely tools that are being arbitrarily thrown at the symptoms of a crisis. These tools can never fix the underlying flaws of consumerism. Indeed, they may even be doing harm.

This thesis proffers a set of solutions: The evolution of the global economy beyond its present services-based paradigm, and into a fourth horizon of human exploration. The establishment of radical tools and processes for economic transactions which facilitate global human interdependence. Enable the masses of the world to finally undertake their ‘natural responsibilities’ as well as their ‘natural rights’. Evolving beyond any post-consumerism paradigm will require the best and most honorable capacities from all of humanity. But equally, it will reveal an unfathomable wealth naturally residing within us all, and beyond any boundary of nations. l

2 Wealth Beyond Nations

Looking Beyond the Symptoms

The Great Recession which began in 2008 with the collapse of the globalized sub-prime mortgage and

derivatives markets, has caused stunning after-shocks throughout global economies. In the U.S., various government and central bank interventions—including massive bail-outs of the banking and automotive sectors, as well as government spending on various employment initiatives—has failed to rekindle and sustain consumer spending (which normally represents about 71 percent of U.S. GDP). Government debt levels of the U.S. have risen to their boiling point, and as a consequence, the U.S. is now being forced to cut about US$ 8 trillion from the budget. The massive downsizing of U.S. government spending will have to come from devastating and draconian cuts in social welfare and even military spending, as well as from the discontinuance of various tax loopholes so as to (hopefully) replenish tax-based revenues.

Meanwhile, throughout the European Union, bank failures and massive sovereign debt levels have led to even more draconian government spending reductions—which tends to hit the EU states harder than the U.S. due to the higher percentage of EU GDP which originates from government spending, rather than private sector consumption.1 This means even higher unemployment rates throughout the EU. Notwithstanding the deep austerity measures being taken by the EU governments, however, the sovereign debt burden increasingly takes it toll—and as a result, multiple EU states are in palpable danger of bankruptcy and utter economic systems collapse. With threats of EU-wide contagion, these earthquakes ripple back to the U.S. and throughout Asia, where a substantial portion of globalized production facilities and labor is located. Even though world leaders have done their best to throw the kitchen sink at the globalized crisis, the global economic systems seem to be moving inextricably toward the catastrophic edge of a cliff.

And yet, even with all the apocalyptic clouds gathering over global economies, various companies and industries (and the individuals who own and/or manage them) are continuing to reap—and in some cases, increase—their revenues, profits, and wealth holdings. Apple, Inc. and its US$ 46.3 billion in revenues for the fourth quarter of 2011 were 73 percent higher than in the same quarter in 2010—not to mention its US$ 97.6 billion in cash on hand. General Dynamics, a combat vehicle manufacturer, enjoys a US$ 32.6 billion annual revenue, a comfortable operating profit of 11.3 percent, and over US$ 65 billion in backlogged orders (May, 2012). Oil giant ExxonMobil has recovered from its

1 The U.S. consumer market (household final consumption expenditure) is 71% of GDP, whereas most EU states’ consumer market ranges from 43% (Norway) to 56% (U.K.)

2009 slump in revenues (US$ 301.5 billion) to enjoy US$ 486.4 billion in revenues in 2011. Furthermore, wealth imbalances within the general population base have visibly altered the essential societal fabric throughout great swaths of the western economies. As of 2007, a full 50 percent of the U.S. population shared in only 2.5 percent of the nation’s wealth—while the top 1 percent of the population enjoyed 33.8 percent of the nation’s wealth. And in June 2012, the figures worsened. The net worth of the median U.S. family suffered a more than 40 percent drop in home value since 2008—erasing almost two decades of accumulated prosperity.

FIGURE 1

But Figure 2 presents an even more revealing comprehension of how wealth is distributed throughout the U.S. market: the bottom 50 percent of the population earns an average of US$ 2,329 per person; whereas, the top 1 percent earns US$ 1.5 million per person.

FIGURE 2


If left unchecked, wealth gaps often metastasize as a cancer affecting fundamental relationships between peoples. Exhibited throughout history, there is always a limit to how expansive wealth inequality can grow before civil tensions and unrest occur. Today, the wealth gap is growing perilously wide throughout and between societies—with no end in sight. Tensions are growing between classes, races, and even age groups (Figs. 3,4).

FIGURE 3

FIGURE 4

Certainly, it is reasonable to assume that a certain amount of disproportionality will almost always exist within markets, no matter the system or tools employed to mitigate imbalances. However, fundamental common sense should tell us that neither economically nor socially, can the ever-intensifying imbalances we now observe be sustainable. As the above charts illustrate, roughly 80 to 90 percent of the U.S. population base is presently on the wrong end of the wealth distribution

scales—and for the scales to begin to tip back into some form of equilibrium, would require extraordinary measures beyond any scope of any single government or coalition of governments. And surely, we cannot venture into the treacherous and violence-prone territory of mandated wealth re-distribution so as to contrive social and wealth equilibrium. But here’s the thing: issues of wealth distribution inequality, persistent unemployment, or massive debt burdens—these are merely symptoms of a much more essential problem. In order to begin to find solutions which are both effective and sustainable to the ever-deepening global crisis, we will have to look beyond the obvious symptoms of the crisis.

The experience that an industrialized economy could provide the demand for economic production and labor in substantial force so as to sustain a 5 to 6 percent unemployment rate, is only a fairly modern experience. Prior to the very short-lived economic boom in the early years of the 1900s, U.S. wealth ownership tended to mirror European markets, where wealth was generally concentrated within the privileged classes. Profits from World War I-related revenues provided an embryonic expansion of wealth distribution throughout the U.S. masses; the Great Depression, however, mercilessly wiped out most gains made by the masses. Finally, after World War II, a massive explosion of economic growth fueled 60 years of wealth distribution throughout the masses in both the U.S. and Europe. The middle class, finally, had come into its own.

FIGURE 5

During World War II, companies ran ads promising American consumers a better life after the war.


Suddenly though, as a consequence of the 2008 Great Recession, the air has, again, been violently let out of the balloon of middle-class prosperity. The exuberance of the ‘American Dream’, exported throughout the world by mass-consumerism, and fueled by mountains and mountains of debt, now seems to be gasping for air. Why have economic markets provided the latter half of the 20th Century with so much wealth, whereas the 21st Century is faltering, economically? Where did the magic go?

To explain this, we need to take a bit of a walk through history—to wipe away the dust from the victory trophies of mass-consumerism that line our shelves. As we begin to re-live the glorious races from the past, we will ultimately come face-to-face with this realization: modern societies have blindly inherited almost everything we know and experience from a very distant past, and thus, have simply forgotten that what we have inherited were once answers to different problems at different points along history. The harsh reality is, however, those answers have simply become outdated and no longer apply to the problems of an affluent, post-industrial society in the 21st Century. The global economic crisis will not be resolved by making changes to tax policies, or how government subsidies are managed, or any other conventional tool of government. The crisis will not be resolved by replacing or retaining any particular political party or ideology. The crisis will not be resolved by reigning in or letting loose the gladiators of free market capitalism (or any other ‘ism’). Inevitably, we will have to accept that not only will we need a new game-plan—we will need a whole new game.

To fundamentally change something so globalized, so institutionalized, and so ingrained into our very identities as mass-consumerism—this is the harsh reality that is, understandably, so hard to accept. Everything around us—our places of industry and employment, our shopping centers of commerce, even our very schools—will inescapably need to be transformed. This thesis will argue, however, that unless humanity can accept that the flaws of consumerism are beyond repair, and that some radical alternative is required—then global economies will be forced to follow the undisputed laws of gravity; and fall hard they will.

Consequently, we will have to travel backwards so that we may travel forwards. We will have to view two particular aspects of history as it applies to our shared experience of the global economic crisis: firstly, what is the essential purpose and function of economics in its philosophical and political sense (the macro side of socio-economics)? If purposes change, then shouldn’t we expect that functions should also change? Then, within this macro context, what are the specific fuel and tools which propel and sustain the vehicle of economics (the micro side of socio-economics)? If functions change,

then shouldn’t the tools and fuel also change?The first victory trophy we admiringly lift from the

dusty shelf, reads: “Wealth of Nations: 1776”.

The Marketplace: Old versus New

The year was 1776—the United States of America was being born, colonization and slavery were at

their height, the First Industrial Revolution was only 26 years old, and Adam Smith published An Inquiry into the Nature and Causes of Wealth of Nations—a book that would reshape the world and set the stage for much of our modern-day misunderstandings of economics. Succeeding generations have taken Smith’s analysis of economics—which were true and constructive in his time—and unchangingly attempted to force a square peg into a round hole.

This is not to be construed as a critique of capitalism; capitalism is the aggregation and mobilization of capital and labor assets to produce the goods to be consumed. Capitalism is merely a tool we presently wield to construct and fuel the vehicle of consumerism. The critique being put forward here is that consumerism acting as the primary vehicle of an economy, inherently corrupts the concepts and tools of capitalism. Our deeper question is beyond that of how the markets operate: for what general purpose do they operate? Although it is wholly unfair to view Smith’s work not in its entirety, his two most parroted and evocative observations were these:

The power of a national economy is to allow self-interest to be guided by the invisible hand of free markets.

The complex role between government, business, and societySo as to best increase the power of a domestic

national economy, self-interested competition in the free market would operate like an invisible hand, guiding and benefiting society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. But Smith was primarily concerned with protecting the security of domestic industry from foreign industry—and that domestic markets free from government intervention were the most effective option to increase the power of national economies, and thus, serve the government’s larger interests of maintaining or increasing power on the world stage. Smith’s encouragement of free markets was not exclusively in support of governments, per se, or of large land owners, or of budding industrialists. At its core, Smith believed that the cause of increase in national wealth is labor, rather than the nation’s quantity of gold or silver. Smith writes [emphasis added]:

“As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its


produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other eases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.”

Smith’s philosophies here were indeed appropriate to consider for that period and those circumstances where nations were constantly threatening and being threatened by other nations. Tensions were at their boiling point between England and France, within France herself, England and its revolutionary-prone colony in America, as well as Austria in specific and nearly the whole of Europe in general, and even India. But, in our modern context, we must be driven by wisdom, rather than tradition or ideology—so that we might effectively apply the correct tools to the correct vehicle. In 1776, the European-wide vehicle to fuel and maintain was: interstate competition so as to ramp up national economies as rapidly as possible. In the globalized 21st Century, however, the vehicle simply cannot be: the strongest national economy wins. Humanity has progressed to the point where an Apple iPad is dependent upon supplies, technologies, and services originating from the U.S., South Korea, Japan, China, Taiwan, and the European Union. In a modern context, it is nothing but lunacy to, on one hand, raise your national fist so as to compete against other nations, whilst on the other hand, open your national hand as a gesture for other nations to kindly purchase your goods and services. Consequently, the antithetical vehicle of letting loose free markets for the specific task of expediting interstate competition must finally be relinquished to the museums of history.

Importantly, Smith provided a warning alongside his encouragement of a free market. Smith was concerned that a total government hands-off (laissez-faire2) economy would quickly become a conspiracy of 2 Smith never used the term laissez-faire. French economists (Physiocrats), at the time, believed that land agriculture was the source of national wealth (rather than mercantilism or industry). The Physiocratic motto: Laissez faire et laissez passer, le monde va de lui même! (Let do and let pass, the world goes on by itself!). Thus, the criticisms of laissez faire policies which have followed in the generations since, originate not from a critique of free markets, per se, but rather from a particular school of economists who were critical of the French nobility and church; arguing that they made up the only real clients of merchants and manufacturers.

businesses and industry against consumers, with the former eventually overpowering the institutions of politics and legislation. Smith states that the interest of manufacturers and merchants “...in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public...The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention”.

And this concern of economic conspiracy, certainly, is not unreasonable. Many today contend that democracy itself is now being threatened by the rise of the ‘stateless corporation’. In a 2011 MSNBC interview with economist Jeffrey Sachs, Sachs recounts a conversation he had with the board chairman of one of America’s largest corporations: “He said we are bigger than any country… we don’t care about local conditions, local norms. We can pay ourselves anything. We are essentially detached from any home country.”

Researchers of globalization and stateless corporations (technically referred to as transnational corporations, TNCs) have generally been interested in the rapid evolutions in the global scope and reach of various types of TNCs —particularly those who own and control the mass media, notably television networks and the transnational advertising agencies. The concern being that TNCs are dependent upon, and committed to, the spread of particular patterns of consumption and a culture and ideology of consumerism at the global level (Feadierstone, 1990; Sklair, 1995). How specifically can any single government equally protect its national sovereignty, whilst at the same time, be subjugated by extremely powerful stateless corporations? The answer is that this paradox is impossible to resolve with old tools and old vehicles. Fueled by generations of misunderstandings regarding the purposes and functions of self-interested free market competition, at what point does the power of stateless corporations cross the line—instigating on a global scale a governing rule of plutocracy?

Plutocracy is: the rule of the rich, political power controlled by the wealthy. In a formal 2006 Citigroup Equity Strategy memo, Revisiting Plutonomy: The Rich Getting Richer, the memo authors even coined the word ‘plutonomy’, which describes an economic system where the privileged few make sure the rich get richer and that government helps them do it. Selected quotes from the memo: Ѽ “Asset booms, a rising profit share and favorable

treatment by market-friendly governments have allowed the rich to prosper… [and] take an increasing share of income and wealth over the last 20 years.”


Ѽ “…the top 10%, particularly the top 1% of the United States–the plutonomists in our parlance – have benefitted disproportionately from the recent productivity surged in the US… [and] from globalization and the productivity boom, at the relative expense of labor.”

Ѽ “… [and they] are likely to get even wealthier in the coming years. Because the dynamics of plutonomy are still intact.”

In his infamous 2008 Statement to the US House Committee on Oversight and Government Reform, former Chairman of the U.S. Federal Reserve, Alan Greenspan admitted fault in opposing regulation of derivatives and acknowledged that financial institutions didn’t protect shareholders and investments as well as he expected. A Congressman then pressed him to clarify his words: “In other words, you found that your view of the world, your ideology, was not right, it was not working?” Greenspan replied: “Absolutely, precisely. You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well. Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity—myself especially—are in a state of shocked disbelief.” Referring to his long-standing free-market ideology, Greenspan said: “I have found a flaw.”

Any objective observer would most likely conclude that Smith’s warning that unregulated business could work against consumers was indeed prophetic, yet unfortunately, heeded by neither governments nor the masses for over 200 years. We now live in an age where Smith’s self-interest-driven free markets have been both misunderstood by the masses and abused by a select few.

But there is a further, less conspiratorial distinction to be made between the markets of 1776 and today. The very substance of production, then, was still emerging from a largely agrarian society into the early stages of industrialization and urbanization. Again, for that time, mass industrialization—and thus, the self-interest philosophy—was indeed well suited during a time of widespread poverty where production of basic goods was necessary. Imagine what the typical production of basic goods was like: a professional landowner would take his product of, say, apples to a large merchant trading house for quality evaluation and sale. Of course, it was both cumbersome and ineffective for a government to look over the shoulder of either the landowners or the merchants, and to mandate, say, what size, shape, taste, or value an apple should possess. The merchants knew very well their clients, and what their clients demanded from apples. Stand back government, and let us make an economic transaction, we’ll pay our taxes to you, and you keep on being a king or a lord, enjoying a bigger and bigger purse. Have a nice day!

FIGURE 6

Corn Exchange, from Microcosm of London, R. Ackermann (1808).

But what happens when the quaint food market is replaced with a coal-to-liquids production plant? Coal liquefaction is a process of producing synthetic liquid fuels from coal—thought by many to be an excessively expensive and polluting process. In Smith’s self-interest-driven free market, the coal company should operate in its own self-interest, build and operate the facility, disregard any pollution hazard, or for that matter, any labor hazard, sell the finished product to the market, make a profit, pay a bit of taxation, and call the government fortunate that national GDP was increased as a consequence of their production output and sale of fuels. Not really the same kettle of fish as a quaint food market in 1776, is it?

To make this a bit more complex: governments of today are so desperate to reduce their high (and still rising) unemployment rates, that creating jobs—any jobs—is urgent and now as important as the overall GDP output. And more poignantly, consider a small town such as Wellsville, Ohio: its 8,000 residents 40 years ago were thriving as a result of the steel mills. But now the mills have closed, and the town’s population has halved. Only 65 students graduated from the local high school in 2011, and all but a few will likely leave Wellsville. Of the 2,000 homes here, nearly 400 are vacant. But, on the other side of the equation, the region’s environment was finally beginning to recover from the vacated steel mills.

So, when a proposed $6 billion coal-to-liquids plant that would create 4,000 construction jobs and require 500 people to operate was pitched to the town, the desperate residents welcomed the idea, at least economically. But, understanding that air and water pollution would increase, the town realized that the coal plant would bring harmful consequences besides the much needed jobs. Given that stark choice, the dwindling town of Wellsville, Ohio, ultimately preferred the jobs. One


resident observed: “It’s too bad the working man has to choose work over the environment.”

When markets progress to be much more complex than just selling apples or other basic commodities, Smith’s short-term-based and self-interest-based free market philosophies begin to clash with the long-term challenges of environmental sustainability or the essential welfare of the public masses. Democratic politics is a process of compromise—both sides give up something so that both sides gain something. But how many jobs are worth what tonnage of pollution? Where is the compromise to be made here? Or, is it that these two contradictory choices of jobs versus environment is nothing more than a deception? If the vehicle of economics were to change; if the general direction of the vehicle were to change—then, would these contradictory choices still exist? There is also something more human to be found in the evolving DNA resulting from the coupling of ‘self-interest’ and ‘competition’. Again, if we go back to Smith’s late 18th Century and early 19th Century, most European agriculture was as technologically primitive as it had been in 1600. Most harvest work was done by the sickle rather than the scythe.

Conflicting definitions of ‘efficiency’Adam Smith observed that peasants were still

bound to the land, and described it as a “species of slavery”—to which he attributed the poverty of various regions throughout Europe. Mass industrialization and urbanization—to the then poverty-stricken masses—provided a rapid path out of poverty. Labor, no matter how brutal, was better than slowly dying of hunger. And from the merchant’s point of view, plenty of coins were being rubbed together. And here’s the funny thing about 18th Century mercantilism: there weren’t enough merchants to go around. Competition between rival producers of basic goods and services, in Smith’s day, actually created increased demand throughout the masses (rather than competitors dividing market share). If, say, a hardware merchant newly established itself in a city such as London—offering the newfangled mass-produced hammers, saws, and chisels being churned out by industrialization—the consumers of these products we more likely than not to use these tools to build new horse wagons, merchant stalls, and living quarters for the flood of laborers entering cities each day. These new wagons, merchants, and immigrant laborers, then, created a whole new wave of demand—stimulating new hardware merchants to spring up, which then stimulated even more demand. But in our matured and affluent marketplaces of today, hardware merchants sell less to the ‘professional consumer’, and thus, are forced to sell ‘do-it-yourself ’ tools to the common consumer—where almost no multiplier effect is generated.

To make matters even worse, in affluent economies,

consultants and investment bankers advise the struggling hardware merchants to consolidate with other merchants so as to ‘become more competitive and efficient’. The ‘big box’ DIY store is born, and filled from floor to ceiling with endless rows of hammers, saws, chisels, screws, nails, lamps, grass, flowers, fly repellent, caulking, rope, and even candy. But, think about this for a minute. Just how often does the big box DIY store sell through, or turnover, the 60 cans of fly repellent it has on display? Perhaps months. So, are these 60 cans of fly-repellent actually generating economic activity (other than the original purchase made by the DIY store, and the occasional store clerk who has to clean the dust from the 60 cans)? In an affluent economy, a vast percentage of the stock filling the shelves of merchants all around the world is simply non-productive for long periods of time. Research studies reveal three distinct long-term problems associated with non-productive inventory: (a) the mean abnormal return (the difference between the actual return of a corporate security instrument and the expected return) due specifically to excess inventory is -37.22% (Singhal, 2005); (b) even with so much overstock, 8.2% of shoppers, on average, fail to find their desired product in stock. These out-of-stock events represent 6.5% of all retail sales, causing retailers to suffer net lost sales of 3.1% (Lee, 2003); and (c) even though inventory contains useful information to predict sales for retailers, Wall Street analysts fail to incorporate this information in their sales forecasts (Kesavan, 2010).

Certainly, this is not to be considered efficient markets? If consolidation of merchants into these big box innovations was originally intended to create Adam Smith-like efficient markets (but they do not seem to be achieving this efficiency), then why do we keep on this non-productive consolidation path? Merely for the consulting and investment banking fees? In our affluent economies, we have adopted and misapplied the terminology of efficient markets to merely mean taking advantage of the economies of scale to lower as much as possible the merchant’s purchase price of the goods that it buys. Then, profit margins made by the sale to common consumers can be more ‘efficiently’ manipulated. This short-term and non-Smith-like focus in how we define economic activities such as efficient or productive behavior, only serves to weaken the long-term sustainability of markets. The hole just gets deeper.

Competition: expand markets, or divide and conquer?In our modern and affluent society, free market

competition between rival providers does not necessarily generate a multiplier effect, or expand the markets as it did 1776. It is much more likely that modern-day competition merely divides the existing market share between competitors. This form of competition most often leads to a ‘corporate race to bottom’. Smith’s view


of competition was more focused on how best to manage the demand for products, not necessarily who would win market share. Smith identified two particular aspects of effectively managing demand. Competition maxim 1 relates to standard price fluctuations that occur when there is an imbalance between supply and demand: when demand exceeds supply, the price goes up. When the supply exceeds demand, the price goes down. Relating to competition maxim 2, Smith was particularly enthusiastic that producers and merchants should seek innovative paths to the marketplace—and from that particular niche, generate a larger profit than normal: Ѽ Find a commodity that few others have that allows

for a high profit, and be able to keep that secret; Ѽ Find a way to produce a unique commodity (the

dyer who discovers a unique dye); Ѽ A monopoly is essentially the same as the dyers

trade secret, and can thus lead to high profitability for a long time by keeping the supply below the effectual demand. “The price of monopoly is upon every occasion the highest which can be got. The natural price, or the price of free competition, on the contrary, is the lowest which can be taken...”

Smith was not advocating a damn-the-consumer or cut-throat approach to competition vis-à-vis monopolization. He was advocating that an innovative market discourages flooding a marketplace with too many commonplace goods which could lead to socio-economic lethargy, or the infiltration of fraudsters and mere copycats which could lead to socio-economic malevolence. Innovations help to stimulate the productivity of the consumer, and grow the domestic national economy even more effectively. At a certain point in the maturity of the marketplace, however, competition with respect to a commonplace product, commands lower prices, and consequently, lower taxes for the state. Smith was offering a vision of true dynamism; this was not commerce allowed to grow complacent, merely offering a common product to the consumer in a fashion that was disinterested in the eventual well-being and livelihood of the consumer. But rather, producers, merchants, and consumers were all participating in an ever-progressing individualized challenge to innovate—and that everyone understood these cyclical innovations, like re-oxygenated blood, would naturally flow from and between all participants in the marketplace. An innovative manufacturing process of a wood saw helped a carpenter to cut wood faster and with greater precision; and an innovative design of a plow helped a farmer to harvest more efficiently —these innovations increased the productivity of the consumer, and profited all participants in the marketplace.

In today’s modern marketplace, we can see this positive form of competition vis-à-vis innovation-

monopolization in operation between Apple and Microsoft operating systems and computer hardware. Apple intentionally made a business decision to monopolize both its software and hardware products; whereas, Microsoft licensed its software to multiple hardware manufacturers. Microsoft’s strategy provided the company with decades of command over the business-oriented consumers; whilst Apple’s monopolization strategy provides the company with exceptional profit margins of 30.7% (iPad, 2010, Personal Computing Industry Centre).

The negative use of cut-throat competition—found in the majority of our modern markets—can easily be represented in everything from PC and other home electronics manufacturing, to general retail and food. As we have witnessed over the years, the PC and general retail graveyard just keeps on getting more crowded as a consequence of simply not being able to lower prices any further. One brand versus another does not necessarily increase a consumer’s level of productivity... and this disconnect between consumption and productivity is what largely distinguishes our modern markets from those of the 18th Century. Indeed, a recent trend of consumers using their smartphones for ‘showrooming’ purposes (when shoppers come into a store to see a product in person, only to buy it from a rival online, frequently at a lower price), represents a potential sea change in how consumer markets operate. Its implications for brick-and-mortar retailers are already sending shock-waves throughout the market. Retailers will increasingly be forced to lower prices even further, and/or provide some other form of incentive for the consumer to continue purchasing from physical rather than online retailers. In today’s market, the role of the ‘Main Street’ merchant is increasingly under downward pressure—and this can only have a negative impact on labor demand throughout all sectors of the economy.

FIGURE 7

“Linens ‘n Things” vacated store, Skokie, Illinois 2008


The intention of competition in the poverty-stricken 18th Century was to expand markets. Today, the intention of competition is to either conquer or divide already existing markets. Consequently, when competition to conquer or divide markets is the name of the game, the notion of ‘self-interest’ also takes on a different intention than Smith initially envisioned. Then, self-interest became a propellant—expanding the economy and the power of the state more rapidly than government bureaucracy could achieve. But now, in context of competing in affluent markets (where labor is globalized and automated, and stateless corporations no longer are loyal agents of one specific domestic economy), self-interest becomes a divisive and destructive tool which may, or may not, expand the power of the state. When the demand for domestic labor is high and growing, then competition becomes an effective tool to stimulate outward growth. But when domestic labor demand is low (and being made lower each day due to the aggressive growth in automation and labor globalization), then, competition leads to inward-focused social tension and incites a ‘race to the bottom’. Competition and self-interest, in a post-industrial society, degrades into sheer social Darwinism.

Radical shifts in consumption & labor in an affluent societyA typical general store in early 19th Century

America, selling primarily hardware and groceries, saw local residents visit the store an average of only twice per month, customers paying for their purchases with cash, store credit, skins, and wood (Perkins, 1991). Today’s market, however, is much different. Researchers at Japan’s Fukuoka University Institute of Quantitative Behavioral Informatics for City and Space Economy (2010) observe that a critical concern of managers of shopping centers and city commercial centers is how visitors are motivated to stay for longer periods of time at the shopping facilities (average 173 minutes per visit per visitor). These types of studies, however, do not reveal the fundamental shift that has occurred in the very purpose of consumption from the 18th Century to today: the diminishing capacity to generate a multiplier effect.

In very general terms, economists study two types of economic inputs which produce a ‘multiplier effect’ throughout the marketplace: short-run and long-run multipliers. An example of a short-run multiplier would be related to the construction of a new production facility, which would produce a substantial, but temporary increase in labor demand for construction-related jobs. A long-run multiplier would be the permanent labor jobs created at the new production facility, along with increased demand for local restaurants, gas stations, retail shopping, etc.

Less understood, however, is what function of utility-profit multipliers our modern consumption

produces within an affluent society. In the 18th Century, when a consumer purchased, say, a saw—the saw was more than likely to be utilized as a tool to eventually earn profit for the consumer (via the construction of a wagon, etc., which was then purchased by another consumer). But in today’s market, when a consumer purchases a saw, or even a smartphone, these products are more than likely to be utilized for personal, non-profit making, and entertainment purposes. If a profit is to be generated additional to the original purchase of, say, a smartphone, the additional profit would more than likely be earned by the telecom operator or an external service provider, such as a music purchasing platform, or game developer, etc.; not by the consumer.

This is a profound shift in the diminishing relationship between producer, consumer, and utility-profit. Modern consumption has become, essentially, a self-gratification-focused ‘dead end’, rather than sparking new wealth generation potentialities for the consumer. This shift does not infer, however, that utility-profit cannot be generated by the average consumer in an affluent society. Indeed, with the correct encouragement, facilitation, and infrastructure, any and all consumers of technologies such as smartphones could potentially utilize these technologies to generate substantial volumes of new wealth. The final section of this thesis will discuss this potentiality in more detail.

But in our present construct of the marketplace, we are now in a situation where producers of consumer goods are ceaselessly under pressure to lower their prices (so as to push or accelerate consumption)—often to the extent that profits simply cannot be generated. And this ‘corporate race to the bottom’, then, has increasingly negative consequences upon labor demand as well as consumer-driven new wealth generation.

The observations made here are actually not new or revolutionary. Many of these same observations were made by the economist John Kenneth Galbraith in his 1958 work, The Affluent Society: Ѽ Based on emotion rather than utility, the production

side non-authentically generates consumer desire. Ѽ As a consequence of the producer providing

consumer credit, this creates a flow of capital to facilitate consumption where employment wages, alone, was incapable of creating such capital.

Ѽ The relationship between consumption and utility has become weak or perhaps even negative.

Ѽ The structural pressures to increase private consumption drive out the provision of public goods (such as social welfare, healthcare, infrastructure, even defense).

Ѽ The econometric ‘conventional wisdom’ held by both experts and lay persons has been misplaced. Mass industrialization—for a limited time—was indeed well suited during a time of widespread poverty where production of basic goods was necessary. But


America and other highly industrialized states had progressed to one of widespread affluence, where production was based on luxury goods and wants. Thus, the underlying foundations and tools of economics should also evolve. But, they have not evolved.

Just a few years earlier in 1950, economists Colin Clark and Jean Fourastié developed an economic model which divides economies into three sectors of activity: extraction of raw materials (primary), manufacturing (secondary), and services (tertiary). It is the unforgiving revolution into this tertiary, or services sector which corresponds to our present state of economic development (some refer to this as post-industrialization). In this tertiary sector, the primary and secondary sectors are increasingly dominated by automation, and the demand for workforce numbers falls in these sectors. Labor then is forced to transfer into the tertiary sector. The services sector generally includes: government, telecommunication, information technology, pharmaceuticals, healthcare/hospitals, education, banking and financial services, insurance, legal services, consulting, news medias, casinos, tourism, and retail sales.

But the question Clark and Fourastié could not foresee was just how far this tertiary sector could expand until services grew to be inauthentic and coercive in the extreme—causing a quaternary sector to potentially emerge. As Figure 8 illustrates, Clark had calculated that U.S. manufacturing labor demand had peaked as early as 1939, and that labor demand was then to be primarily located in the services sector.

FIGURE 8

Indeed, as Figure 9 illustrates, from 1962 to 2011 in the U.S., labor demand in the services sector increased by 211%; whereas labor demand in construction and manufacturing only increased by 11%; and mining and logging contracted by 7%. Clearly, a fundamental shift

in what economic markets tangibly produce has taken place over the past 50 years. But, as we will demonstrate in a moment, the methods by which these changing markets are measured and managed, have not changed since the 18th Century.

Figure 10 illustrates that from 1970 to 2010, the services sector contributions to world GDP production rose from 53% to 72%; whereas both manufacturing and agriculture contributions fell.

FIGURE 9

FIGURE 10

In 1987, Zoltan Kenessey of the U.S. Federal Reserve Board, observed: “Modern economics, despite the long (albeit often flawed) tradition of thoughts about sectoral differences, has mostly neglected structural-sectoral analysis”. One of the most neglected aspects of sectoral differences relates to how productivity is


measured. The U.S. Bureau of Labor Statistics (Report 993), defines its methodology for measuring labor productivity: “Measures of labor productivity describe the relationship between output and the labor time involved in its production and are constructed by dividing an index of real output by an index of labor hours.” The origin of productivity management is deeply rooted in the context of mass production—therefore, issues of productivity are mainly analyzed in this paradigm. But, here is the problem with measuring productivity in this way: productivity of manufacturing organizations is measured in quantitative units of input and output (and assumes both input and output are relatively equal in quality). Relating to the services sector, however, this type of quantitative measuring is wholly inadequate. Both input and output in the services sector consists of quantitative, qualitative (Reid, 2005), and correlative (Gummesson, 1992). Let’s take an example:

Harvard Business Review estimates that U.S. corporations spend US$ 50 billion annually on change management consulting services—and that a full 70 percent of these change management projects fail. At present, economic institutions such as BLS only measure the quantitative aspect of productivity in this instance of change management services: essentially, the number of labor hours and other costs which were utilized to generate this US$ 50 billion in revenue.

However, the actual qualitative benefit (or loss) to the corporate purchaser of these consulting services, is not being measured (or managed). And since economic markets are deprived of measuring the qualitative impact of productivity relating to the corporate sector, it is then impossible to measure or manage the correlative impact of productivity upon the company’s end-customers. Assume a clothing manufacturer purchases change management consulting services, and these services ultimately fail in their objectives (say, management teams do not learn to collaborate more effectively), how does this failure of management teams to collaborate translate to the end-consumer—both in experiential as well as revenue generating terms?

On a conventional institutional level, these change management consulting transactions are seen as a positive line-item on the national balance sheet—no matter their qualitative or correlative effects. However, in reality, the above transaction example would have a profound (albeit unmeasured) negative impact to the national balance sheet. Economist William Baumol, observed in 1998: “Some analysts have attributed much of the current slowdown of productivity expansion that has plagued the United States for the better part of two decades to the increasing proportion of the nation’s labor force that is employed in the services sector”. The services sector now comprises 72 percent of the world economy—yet, the world’s economic institutions are using productivity measuring methods

based on standards relating to mass-production that were developed in the 18th Century. To put this in clear perspective: the U.S. Congress, CBO, White House, Federal Reserve, the European Union, ECB, European member central banks, Asian and African banking systems, global commercial banks, hedge funds, think tanks, and academic institutions—all still measure and manage productivity within the services sector in the exact same way they measure and manage productivity in the industrial sectors. As political and business leaders attempt to convince their respective constituencies that the global economic crisis is to be solved primarily by adjusting various aspects of tax or regulatory policy, austerity or government spending measures, more European Union member integration measures, etc.—essential mechanisms such as services sector productivity and services sector multiplier effects, are being absolutely neglected. If the above Harvard Business Review estimate is correct that a full 70 percent of change management consulting services fail, and if we grossly assume only a 5 percent failure rate for the entire U.S. services sector, this would represent US$ 540 billion in lost productivity (and this is just the quantitative part of the equation). This amounts to 3.6 percent of U.S. GDP, or the annual Medicare budget. The truth is, we don’t really know how much of our GDP is comprised of non-productive output in the services sector. Nobody is measuring this function of our global economic systems. A strong reason why these complex types of econometric input and output streams are not institutionally maintained is that since the days of Adam Smith, the larger political objective of states has been to build a strong national economy measured by GDP; anything that might detract from this political objective—no matter the impact upon truth and accuracy—is eschewed.

But, to also address the Harvard Business Review findings in broader socio-economic terms: case studies consistently explain these change management services failures are due to the fact that corporations are initially deploying change management projects so as to facilitate a specific tactical objective. What is being persistently avoided by the corporate sector is the fundamental organic element of change itself: what actually constitutes value in the 21st Century, and how is this value made tangible between company, labor, and consumer? It could be argued that raw materials extraction and some (not all) aspects of manufacturing once required a ‘controlled-island’ approach to organization—where each organization was its own isolated profit center. But, in a modern affluent society, and particularly relating to the services sector and beyond, a new ‘interdependent-global’ approach has yet to blow away the cobwebs from our 18th Century trophy collection.

Nearly all of our so-called modern socio-economic infrastructure is geared toward facilitating only two of


the three sectors which we have adopted from the past. Let alone our institutions not being able to effectively facilitate the services sector, we are not even daring to look forward to the unavoidable expansion of the quaternary sector (or beyond). It should be clear that without addressing these essential functions relating to how modern markets are qualitative and correlative as well as quantitative—no amount of government policy intervention will substantively alter the course of the present global economic crisis.

Business and labor: a failure to evolveOur modern socio-economic infrastructure has

failed to evolve so as to effectively measure and manage the three sectors of raw materials, manufacturing, and services—and this lethargy has trapped the masses into not pursuing the development of any evolutionary quaternary sector. At the same time, the day-to-day relationship between businesses and labor has also failed to evolve. The essential operations of 21st Century businesses and labor are floundering in paradigms long outdated and even destructive to creativity and progress.

Management advisor, Dan Pink, is a forceful voice for helping us to observe that a profound “mismatch exists between what science knows and what business does.” As far back as the 1940s, the Gestalt psychologist, Karl Duncker, devised an experiment to test what he termed ‘functional fixedness’. Duncker observed that people often had difficulties in visual perception and in problem solving as a consequence “that one element of a whole situation already has a (fixed) function which has to be changed for making the correct perception or for finding the solution to the problem”. His experiment, the ‘candle problem’ (Figure 11) is elegantly simple.

FIGURE 11

The task of the experiment is to affix the candle to the wall so that, when lit, the candle wax does not drip onto the table. The experimenter provides the

test subjects with the following extrinsic motivators (something external to the test subject): for the top 25 percent of the group which can complete the task in the quickest time, a reasonable financial reward is given. For the person completing the task in the fastest time, a more substantial reward is given. A ‘control group’ was given the task without any incentives at all. Result: the test subjects motivated by reward took longer to complete the task than the test subjects receiving no motivation. The reason for this seemingly counter-intuitive result is that when the task is narrowly defined, mechanical in nature, and requiring no real sense of creativity, financial (extrinsic) rewards work well. This pretty much defines the bulk of the labor requirements of the 19th and 20th Centuries. But, the 21st Century requirements of the services sector (as symbolized by the candle problem) are based more on cognitive and creative skills as well as moral/ethical judgement. In these areas, extrinsic rewards are not only ineffective, they often do harm.

These types of candle problem experiments have been repeated over, and over, the past 70 years—all with the same results. In 2005, the U.S. Federal Reserve Bank, after completing a joint study in the U.S. and India, published the following (Boston Working Paper No. 05-11): “[O]nce the task calls for even a rudimentary cognitive skill, a larger reward led to poorer performance.” Yet, as Pink warns: “the vast majority of businesses around the world are still operating, are still making their decisions based on assumptions that are outdated, unexamined, and rooted more in folklore than in science.”

The underlying objective that seems to be motivating the business sector to not accept what observable science is recommending, is that business owners are singularly focused on forcing compliance upon the labor force (this is what you must do to get paid), rather than to allow the labor force to be intrinsically engaged into the deeper affairs and inner workings of the business (let us work together). The three clear observations to made in this candle problem example: 1. The challenges and tasks of the 21st Century require

all economic actors to be engaged in some type of collaborative partnership, rather than bound by conventional owner and labor-rent relationships.

2. Rather than compliance coerced with carrots and sticks, what motivates modern-era labor resources is more naturally and intrinsically felt (internal to a person’s sense of consciousness).

3. Pink observes what stimulates a person’s internal sense of consciousness (and thus, performance motivator) is “the yearning to do what we do in the service of something larger than ourselves.”

Oh, yes... the solution to the candle problem: remove the tacks from the box, affix the box to the wall


with a few tacks, place the candle in the affixed box, light the candle with supplied match. The tacks in the box was Duncker’s observation of ‘functional fixedness’; it is what prevents most people to see beyond the fact that the box holding the tacks could be used for any other purpose.

A deeper understanding of just how dysfunctional and outdated is our socio-economic paradigm, allows humanity to react more realistically and wisely when we hear political and business leaders make various partisan-based recommendations relating to tax and regulatory policies so as to facilitate discipline and growth in the economy. With respect to the global economic crisis, the rhetoric of government and business reforms to which citizens are exposed on a daily basis, simply obscures the much deeper crisis facing global economies: how and why markets, corporations, labor, and consumers operate are still being shaped by logic established in—and unchanged since—the 18th Century.

The financialization paradoxFinancialization is a modern phenomenon defined

as a: “pattern of accumulation in which profit making occurs increasingly through financial channels rather than through trade and commodity production” (Krippner, 2005). There are four distinct observations to be made about the profound role financialization now plays throughout global markets:i. How money is createdii. The new profit segment of trade and commodity

production: consumer creditiii. Natural flows (and vacuums) of money & the

tragedy of the commonsiv. The social cost and role of government

i. How money is createdIn early 2012, an interesting series of debates began

in the blogosphere relating to precisely how money is created. These were not the typical anti-Federal Reserve conspiracy theory bloviations that have often plagued and embarrassed serious examinations of economic theory. These more authentic debates involved a Nobel prize-winning economist, leading academicians, as well as lay observers of economics—and since they focused on fairly technical aspects of money creation, the main-stream media never paid attention to the earthquakes these debates unleashed. Before the core elements of these debates are highlighted here, it is important to provide a rudimentary foundation of money creation.

Essentially, only two institutions are granted authority by governments to create money: central banks acting on behalf of their respective governments, and the retail/commercial banks themselves. A substantial majority of all money currently used throughout the world monetary system is fiat money —money that is created by basic government decree. Prior to 1971,

world currencies generally operated from a system of representative money—as an example, between 1944 and 1971, the Bretton Woods agreement valued U.S. currency at US$ 35 representing each 1 troy ounce of gold the country possessed. There is an exclusive system for the creation of fiat money (whether created by governments or retail/commercial banks): the issuance of debt. A central bank—as a consequence of a debt or bond agreement with its government, either prints new physical currency or creates new electronic funds which are then distributed into the marketplace. The collateral for funds issued by central banks is generally nothing more than a government’s guarantee to repay the funds with interest—this is what is referred to as sovereign debt. The problem, of course, with sovereign debt is that if governments cannot collect enough tax revenues and fees, etc. to repay these debts to the central bank, governments are forced to borrow additional amounts in an effort to stimulate economic activity, and thus hopefully, increase tax revenues. Or, as we are now witnessing in Greece (and potentially Spain, Portugal, Cyprus, Italy, etc.) governments are forced to default on their debts (which causes a knock-on effect throughout the entire market due to substantial cross-border banking activities). This part of the blogosphere debates were not in question; the debates, rather, centered on how retail/commercial banks created money.

The Nobel prize-winning economist participating in this debate attempted to postulate that the average retail/commercial bank operates as an intermediary between those that deposit funds in their banks and those that borrow funds from their banks. This simple statement was all it took to light the blogosphere on internet-fire. Banks being intermediaries between depositors and lenders may have been the business model 15 years ago, but no longer. In today’s market, an average of 92% of the banking sector’s lending portfolio is appropriated for home mortgages; whereas 8% is appropriated for business lending (Dyson, 2012).

FIGURE 12


As Figure 12 illustrates, if one were to think about a typical bank’s portfolio for very long, it would be clear what was the fatal flaw of the Nobel economist: a bank would have to have a tremendous number of depositors, and each of those depositors would have to keep a more than substantial balance in deposit so that the bank was able to act as an intermediary and lend out increasingly substantial amounts for housing purchases to the bank’s borrower. In an affluent society of the 21st Century, this simply is not possible; consumers consume, they do not save. Figure 12 demonstrates that from 1950 to 1995, households indeed held more in personal saving than mortgage liability. But after the repeal of the Glass–Steagall Act in 1999, the banking system was free to invest in a wider variety of instruments and risks such as the derivatives markets. This was the watershed moment which provided the largely unregulated incentive to create vast new reservoirs of electronic money (US$ 5.7 trillion between 2000 and 2006 for home mortgages, alone; does not include other bank debt instruments). Conversely, total private saving for that same period (2000-2006), only amounted to US$ 1.7 trillion. Once the bubble burst in 2008, personal saving again exceeds home mortgage liability.

How exactly did the banks create the new reservoirs of electronic money? The answer is elegantly simple: once a loan officer comes to an agreement with a borrower to obtain a home mortgage, the banker simply sits down at the computer and inputs the specified mortgage price, and voilà, brand new electric money is created (Dyson, 2012). The bank creates its own fiat money by corporate, rather than government decree. No need to play intermediary with someone else’s money. Since the real estate is secured as collateral, the bank will either be repaid on its loan (with interest) or the home is assigned back to the bank. Loans create deposits. Deposits do not create loans. This credit-driven money supply is referred to as endogenous money, rather than exogenously created by monetary authorities.

Charles Goodhart of the Bank of England has attempted for many years to reform official government and banking system doctrines of analysis and reporting of money creation and supply. As early as 1988, Goodhart has characterized the exogenously created base money multiplier model as “such an incomplete way of describing the process of the determination of the stock of money that it amounts to misinstruction” (Howells, Mariscal, 2005). Figure 13 illustrates the outdated, but still orthodox and institutionally-recognized exogenous money multiplier model. In 1994 (What Should Central Banks Do?), Goodhart observed: “Almost all those who have worked in a [central bank] believe that this [orthodox] view is totally mistaken; in particular, it ignores the implications of several of the crucial institutional features of a modern commercial banking system...”. Governor of Bank of England, Mervyn

King, observed: “One of the most contentious issues in assessing the role of money is the direction of causation between money and demand. Textbooks assume that money is exogenous. It is sometimes dropped by helicopters, as in Friedman’s analysis of a ‘pure’ monetary expansion, or its supply is altered by open-market operations. In the United Kingdom, money is endogenous—the Bank supplies base money on demand at its prevailing interest rate, and broad money is created by the banking system. The endogeneity of money has caused great confusion...” (Bank of England, 1994). In a U.S. Federal Reserve Staff Working Paper (Money, Reserves, and the Transmission of Monetary Policy: Does the Money Multiplier Exist?, 2010) Carpenter and Demiralp concluded the simple textbook base money multiplier is: “implausible in the United States”.

FIGURE 13

The outdated, but still orthodox model of money creation

And yet—no matter that real-world evidence persistently demonstrates the rising predominance of the modern endogenous credit-driven money supply model—world governments, university textbooks, and even Nobel prize-winning economists continue to retain and operate from outdated orthodox views of money creation. From what seems to be an across-the-board institutional indisposition to officially recognize, analyze, and report the national-global monetary impact of endogenous credit-driven money supply, three observations seem relevant:

Firstly, the transnational (stateless) private banking system’s modus operandi of money creation is largely


operating outside official government orthodoxy which is tasked to regulate (control) the fundamental fiscal and monetary policies of a sovereign state. A primary task of governments and central banks is the control of inflation (equally, deflation), and a vital controlling tool of inflation/deflation has traditionally been the monetary authorities’ control over the supply of money (as well as interest rates). Some economists argue that central banks still wield control over the private banking sector as a consequence of mandating capital reserve requirements (meaning, each bank is required to keep a certain percentage of their deposits in reserve at the central bank; this is referred to as fractional-reserve banking). Part of the logic of central banks holding onto reserves is that they are apprised on a daily basis of the general health of each bank. Other economists, however, argue reserve accounts are largely meaningless in today’s market due to the fact that banks systematically lend to each other via overnight floats, and that private banks essentially self-police each other’s balance sheet health.

Secondly, relative to monetary policies as highlighted above, world governments appear to possess diminishing controls over the overall money supply. But governments seem to possess even less control over how banks further monetize mortgage loans into various globalized derivatives-based instruments, such as collateralized debt obligations (CDOs). It was the collapse of these CDO markets in 2007-08 which precipitated the 2008 Great Recession and the US$ 700 billion Troubled Asset Relief Program (TARP) and Euro€ 1 trillion ECB refinancing operations. The Dodd–Frank Wall Street Reform and Consumer Protection Act, 2010 was the U.S. government’s post-2008 collapse response to partially reign-in some of the more risk-specific activities of the banking and investment entities. Critics of the legislation, however, argue the regulations are not robust enough to deal with the increasingly exotic nature of derivatives. In July 2012, JPMorgan Chase revealed a US$ 9 billion loss in its ‘synthetic credit portfolio’—a derivatives instrument not foreseen in the Dodd-Frank legislation. G20 leaders, in April 2009, established the Financial Stability Board (FSB), which represents the first major international institutional innovation to international financial regulatory standards. Most observers, however, acknowledge that while the FSB is a useful tool to share information between nations, the FSB wields no formal legal standing or regulatory authority. Indeed, the FSB has limited staff, most being seconded temporarily from other organizations like the Bank for International Settlements.

And finally, if the above statements relating to the weakness and perhaps outright failure of institutional governance over the stateless banking sector are true, then precisely what official solutions can be brought

to bear upon the global economic crisis by any single sovereign government? In short, have governments around the world essentially lost control over the money supply, in specific, as well as fundamental macro-economic policies and governance, in general? Finally, if it is indeed true that governments have essentially lost control of the macro-economic levers, then how can governments even pretend to uphold the governance of national economies?

ii. The new profit segment of trade and commodity production: consumer credit

Historical sociologist Greta Krippner provided ground-breaking empirical evidence (Financialization of the American Economy, 2005) regarding the meteoric rise of U.S. corporate profits being generated by the financial services sector. This, in contrast to the dramatically diminishing U.S. corporate profits being generated by industrial sectors of production (Fig. 14).

FIGURE 14

As Figure 14 illustrates, U.S. productive enterprises generated 85 percent of the national profits during the Cold War era, but this has now diminished to 53 percent. Conversely, U.S. financial services generated only 15 percent of national profits during the Cold War era, and this has now mushroomed to 47 percent.

But, if we look deeper into Krippner’s findings, she analyzes the individual line-items of profits accruing specifically to productive enterprises, such as interest, dividends, and realized capital gains on investments—in contrast to the productive enterprises’ overall profits. These ‘portfolio’ profits, then, are an indicator to what extent industrial sectors of production generate profits from ‘activity-centered’ versus ‘accumulation-centered’ operations. The central contributor to these portfolio profits is the industrial producer selling lines of


consumer credit to consumers—so that consumers can purchase the goods being produced. A typical example of this can be seen in the automotive industry, where manufacturers establish substantial financial services divisions providing consumer credit to customers to purchase their vehicles (as well as insurance, online banking, mortgage operations, and commercial finance, etc.). Figure 15 illustrates the ratio of portfolio income to overall cash flow for U.S. manufacturing industries. From 1950 to 1968, the ratio remained constant at a low 0.09—and by the mid-1980s, the ratio rose to 0.6, and by 2001, the ratio rose, acutely, to 0.98. This means that the U.S. manufacturing sector now generates $1 in financial services profit for every $1 of profit generated from the sale of manufactured goods.

FIGURE 15

Krippner observed that these figures also represent the “extent to which firms in highly cyclical manufacturing industries increasingly depend on financial revenues to subsidize profits from productive enterprise”. Additionally, Krippner observed that such extreme dependencies upon financialization may have much broader implications upon corporate operations and governance: “Do non-financial corporations place financial directors [bank and fund managers] on their boards in order to secure access to loan capital... or do bank directors sit on non-financial boards in order to monitor—and shape—the behavior of non-financial clients?”

iii. Natural flows (and vacuums) of money & the tragedy of the commons

Perhaps a way to look at economics is to comprehend that fundamental capital resources as well as financial capital—like everything in the physical universe—

follow the laws of gravity. When gravitational fields (economic value opportunities) are forceful and captivating, the gravity of the opportunity effectively pulls needed capital resources into the environment—allowing the value of the opportunity to be efficiently exploited. Conversely, if value opportunities are scarce, or risk is too high, the gravitational field is too weak to attract capital resources—and economic activity seeks out other environments. And if two competing gravitational fields of value opportunities are attempting to attract capital resources, the resources will naturally flow to where the value is strongest, most profitable, and risk averse (the fundamentals of arbitrage, which is at the core of investing).

In short, this is the state of modern economics operating in the post-industrial services marketplace: no real gravitational force exists which is strong enough to attract capital resources. Imagine the portfolio of a banker in the heyday of manufacturing: lending capital to firms to purchase equipment and supplies, which then hired labor which needed homes, which provided the banks with additional lending opportunities. Everybody in the economic chain is creating value and opportunities for new economic growth—and risk was kept to a minimum by manufacturing equipment and workers’ homes being used as collateral to secure the bank loans. But, as an affluent society requires less of the manufacturing sector and more from the services sector, capital resources are forced to follow the laws of gravity: they naturally flow to what provides value and profits. The services sector provides less lending opportunities due to the very nature that much of services is non-tangible—and cannot be used as collateral. Consequently, a capital resources vacuum is created in the marketplace. It could be said that an affluent society inevitably overcrowds itself into the ‘marketplace of self ’, causing the depletion of capital resources demand—a tragedy of the commons. Consequently, the portfolio of the banker is now looking overgrazed in this post-industrial services-centric market. With portfolios and profits shrinking and growing in risk, what can bankers do? To where should the capital resources flow?

As mentioned earlier, a substantial amount of capital resources were directed toward the derivatives markets using home mortgages as the securitizing (risk minimizing) factor. These home mortgages were packaged, sold to global investors, which split packages and recombined the mortgages with other packages, and resold these new packages to other global investors. But something else was also affecting the gravitational field of capital resources: multiple governments around the world grew increasingly vulnerable to weakening economic markets, and investors found creative ways to financially benefit from government weaknesses.

One such weak government was the United Kingdom. In 1990, the U.K. set into motion to join


the European Exchange Rate Mechanism. But in 1992, the U.K.’s national economic performance made their participation in the ERM unsustainable, and consequently, was forced to withdraw from the system. This was a severe economic and political setback for the U.K.—but not necessarily for global investors. On the morning following ‘Black Wednesday’ (16 September 1992, the date of U.K. withdrawal from the ERM), one single investor, George Soros, who had essentially bet against the British Pound, counted his winnings for one day’s work: US$ 1 billion. And there were many more investors than Soros that benefited from the U.K.’s economic upheavals. How many governments today are struggling to keep their national economies from sinking? How many speculators are there betting on the outcomes of these struggling nations?

Speculation in the mechanics of national economic management is now an immense and essentially ungovernable game being played by a myriad of stateless investment entities. Since 2000, these entities have been given a name: the shadow banking system. The SBS is the agglomeration of financial entities, infrastructure and practices which support financial transactions that occur beyond the reach of existing state sanctioned monitoring and regulation. It includes entities such as hedge funds, money market funds and structured investment vehicles. It has been an increasing practice for investment banks to conduct many of their transactions in ways that are not recorded on their conventional balance sheet accounting—and consequently, are not visible or liable to regulators.

The volume of transactions in the shadow banking system has grown dramatically after the year 2000. By late 2007, the asset size of the SBS in the U.S. exceeded US$ 10 trillion. Although SBS assets declined after the 2008 collapse of the mortgage-backed derivatives market, by late 2011, the global assets have risen to about US$ 60 trillion. The assets now value about one year’s total global economic output. The gravitational field of global speculation has grown so immense, so profitable, so unencumbered by government oversight, that speculation is now operating like a gravitational black hole—sucking any and all available capital resources into its profit-making energy. Why lend to businesses and consumers for relatively low rates of interest, when unfathomable and seemingly limitless profits are to be made in the outer space of global speculation? Why continue to lend to governments when it becomes increasingly apparent that governments simply cannot repay their debt?

In the end, it can be argued that capitalism has worked absolutely perfectly. Capital resources naturally flow to what earns profit most effectively. With a global economy that is 72 percent dependent upon revenues generated by services, there just is not enough gravitational force to attract investment in service-based

enterprises. Consequently, immense capital resources have abandoned conventional markets, and are now swimming in the exotic waters of global speculation.

But this raises a question: is there a danger that all this speculation activity will one day draw so much capital resources into the SBS marketplace, that the SBS marketplace will become essentially over-invested? Will the SBS become a victim of its own successful self-interest? Will the tragedy of the commons play itself out once again? What will be the consequences to economies, societies, and governments all over the world if the SBS bubble one day bursts? If governments are not even proficient in understanding how money supply is created within the private banking sector, then how can they even hope to manage these questions relating to the shadow banking system and their extremely exotic investment instruments?

iv. The social cost and role of governmentIn March 2012, the Federal Reserve Bank of New

York published an analysis of the outstanding U.S. student loan balance: US$ 870 billion. U.S. student loan debt now surpasses the total credit card balance (US$ 693 billion) and the total auto loan balance (US$ 730 billion). College enrollments are presently increasing, the costs of attendance is persistently rising, and the labor demand is not matching the growth in education output or education finance. The analysis also observes: “Student loans support the education of millions of students nationwide, yet much is unknown about the student loan market. Relevant data are limited and, for the most part, anecdotal. Also, sources tend to focus on recent college graduates and do not reveal much information about the indebtedness of parents, graduate students, and those who drop out of school.”

This is an immense and still growing bubble—that when it bursts—will have catastrophic consequences upon the social and economic fabric of the nation. At present, 21 percent of the US$ 870 billion balance is now delinquent. The predicament of the U.S. education system, and its dysfunctional relationship to labor demand, illustrates not simply a flaw in government management, but in fundamental socio-economic dynamics. The affluent society, as a whole, has essentially eschewed the lessons of personal industry; it has lapsed into a downward spiral of self-focused services and consumerism.

As a consequence, because capital resources requirements are minimal in tertiary sector production, the market (both consumers and government) get hooked on the drug of financial stimulus. Government (taxpayers) provides a stimulus to lending institutions vis-à-vis student loan guarantees. Government (taxpayers) also provide a stimulus to itself vis-à-vis central bank interest rates, which in turn, affect consumer and commercial borrowing (ergo, labor demand and


education demand). This could not be made more clear than by assessing the original objectives and eventual consequences of U.S. Federal Reserve monetary policy since the beginning of the 2008 Great Recession. In an effort to stimulate borrowing, spending, and hiring, the U.S. Federal Reserve lowered interest rates. In its ‘Quantitative Easing 1 (QE1)’ program of November 2008, interest rates were lowered. The costs associated with lowering these rates, however, were borne by the U.S. taxpayer: US$ 1.7 trillion in government debt. And indeed, 30-year fixed mortgage rates to consumers fell from 6.33 percent to 5.23 percent by March 2010 (www.bankrate.com). But, the anticipated manufacturing, consumption, and housing markets did not appreciably improve. Consequently, interest rates were again lowered in an attempt to stimulate borrowing, spending, and hiring.

QE2 (November 2010), which cost U.S. taxpayers an additional US$ 600 billion, saw 30-year fixed mortgage rates rise, not fall from 4.42 percent to 4.78 percent. Again, the anticipated manufacturing, consumption, and housing markets did not appreciably improve. So, in September 2011, the U.S. Federal Reserve cut interest rates once again in a program they called ‘Operation Twist’, which cost U.S. taxpayers an additional US$ 400 billion in government debt. Although 30-year fixed mortgages have fallen to 3.63 percent (June 2012), the anticipated manufacturing, consumption, and housing markets have not appreciably improved. From November 2008 to May 2012, the U.S. has created 3.3 million new jobs (BLS). Thus, the correlation of U.S. Federal Reserve stimulus action (US$ 2.7 trillion) to job creation (3.3 million) is US$ 810,810 in government debt per job created.

It does not take an economist to see that monetary policy and government stimulus is not only impotent in fulfilling the government’s objective to stimulate borrowing, spending, and hiring—these actions may actually be doing harm. Harm to the long-term social and economic fabric of present and future generations. Harm to our very ability to escape the vicious cycle of borrowing increasing amounts to repay the mounting debts of the past. Figure 16 quantifies the absolute inability of a modern tertiary-based economy to generate aggregate demand throughout the masses. A comparison between three fundamental rates of growth of the U.S. economy is observed: average hourly wages; household debt; and GDP. Between 1947-1970, average hourly wages grew by 39 percent; but between 1970-2010, wages grew by only 4 percent. This represents an overall 90 percent loss in the rate of growth for wages for these two time periods. But during the same two time periods, GDP experienced an overall 18 percent rate of growth. Obviously, if wage growth was slowing, and GDP growth was rising, something other than wages was fueling GDP growth. Indeed, the rate of

growth during these two time periods for household debt rose by 48 percent. The only true conclusion to be observed from this data: labor wages produced within a tertiary-centric economy, cannot, itself, generate aggregate demand by and between the masses. Without aggregate demand, the system essentially collapses. The global economic crisis is not being caused by a lack of bank liquidity, nor by a lack of government solvency—these are only symptoms of a more central dilemma: present wages do not generate enough liquidity to purchase the capacity of goods and services available in the marketplace.

FIGURE 16

The reason for this disequilibrium: the multiplier effect inherent within the services sector is essentially non-existent or extremely difficult to quantify. For all intents and purposes, once a service has been consumed, it cannot generate further value and profit opportunities. A consumer who purchases a hammer, can potentially produce a subsequent product (a table)—which then can be sold for profit accruing back to the consumer (see Fig. 17, spiral up, on right). But a consumer who purchases a restaurant meal or movie ticket, cannot usually produce any subsequent product—and thus, profit potentiality is absent. The result of this absent subsidiary profit potentiality is that the consumer must make future purchases either from capital gains earned via wages, equity holdings (such as real estate, stocks, etc.), or by incurring debt (see Fig. 17, spiral down, on left).

If the truth were to be admitted, the mountainous debt that individuals and governments are amassing can never truly improve an affluent society’s ability to grow within our present services- and consumer-centric marketplace. The affluent society has finally collided with the immovable brick wall of non-potentiality. We’ve eaten all available grazing land in this pasture of the tertiary economy. The soil of affluence-based


consumerism is now infertile. We need to migrate to new pastures. The question, then, becomes: who will lead us all to these new pastures? Governments? These same governments that still worship the principles of economics written into doctrine in the 18th Century?

FIGURE 17

It gets worse: another revolution has already begunIn an economy already beset by a myriad of critical

challenges—fundamental shifts from manufacturing into affluence-based services-oriented markets, rise of globalization and the stateless corporation, and massive movements of capital resources into financialization—global markets will have to contend with the Third Industrial Revolution now marching our way.

FIGURE 18

Volkswagen’s Transparent Factory, Dresden, Germany

The corporate utilization of advancements in process automation and robotics, advance materials, nanotechnology, and 3D printing—for the express purpose of increasing productivity and decreasing

dependence upon labor—is now moving at hyper-speed. In 1999, a U.K.-based automotive factory built 271,157 cars; and that same factory in 2011, built 480,485 cars—a 43.5 percent improvement in productivity. In 1999, the output depended on an employee-per-vehicle output ratio of 0.16; by 2011, the ratio had fallen to 0.11. More output; less labor needed. The U.S. Bureau of Labor Statistics expects automotive jobs to decline 18% by 2018 despite expected increases in production as a consequence of increased use of automation.

Detailed scientific data regarding long-term effects that automation will have upon the labor force is scarce and provides mixed views as to what extent does automation destroy labor demand versus reallocate that demand. The Impacts of Automation on Employment 1963-2000 (Leontief, Duchin, 1984), as an example, projected that by the year 2000, 10 percent of overall labor demand would be conserved as a consequence of automation. Furthermore, it is difficult to assess in the ‘fog of war’ resulting from global economic downturns, how much of the decreased labor demand is attributed to actual market shrinkage as opposed to increased utilization of automation. Several economists, including Paul Krugman, warn that affluence-based tertiary (post-industrial) societies will be increasingly subjected to a ‘hollowing out’, as mid-level jobs are destroyed by smart machines and high-level job growth slows. David Autor, of the Massachusetts Institute of Technology (MIT), observes that the primary objective of automation is not to destroy blue-collar jobs but to destroy any job that can be reduced to a routine. Thomas Malone, also of MIT, argues that the increasing utilization of automation is simply the evolutionary application of the ‘division of labor’ principles to brain-work. Just as Adam Smith inspired factory managers to break down a manufacturable product into its component parts, modern corporations are increasingly breaking down the production of brain-work into ever smaller components.

Our question of increased use of automation is not whether the effects will ultimately be destructive or reallocative of certain types of labor. But rather, will society as a whole, consciously and intentionally utilize automation for its enlightened benefit to persistently seek out new waters of experience (and thus, prepare itself in advance for any eventual labor reallocation requirements)? Or, will society fall victim to corporations which narrowly focus their sights onto profit-seeking, perhaps at the expense of society as a whole, and intentionally utilize automation primarily or even solely to decrease the demand for labor? As a consequence of a profit-centered rather than interdependent use of automation, then, society would perpetually be required to react to revolutions brought on by automation.

One track suggests society as a whole is self-aware


to the extent that it comprehends which labor activities it desires to replace via automation, and which activities it desires to pursue via human participation. The other track suggests society as a whole is not self-aware, and is being subjugated by self-interested forces of corporatism. As we have attempted to explore in this section of the thesis, blind adherence to outdated 18th Century principles can only lead to a hazardous form of ignorance for a society that must live in the 21st Century. It is because of our collective ignorance about economics and society itself, that we now find ourselves at the edge of a cliff.

The most rapid and effective method to grow a nation’s economy was through the division of labor.

In 1776, industrial production was in its infancy. Everyone was still in awe of the new-born power and potential of mass production. Few people were focused on systemizing and improving this still-new process so as to squeeze out as much productivity as possible. Timely, and brilliantly, Smith made two elegant observations while he was observing the differences between agriculture and industry, and their impact upon the French and English national economies: firstly, labor was either productive or non-productive. An example of non-productive labor is to over-produce a good or service which either has to be destroyed or, if possible, stored until the next consumer cycle. In the 18th Century, there was a great deal of non-productive labor to be had—and Smith and his contemporaries were akin to modern-day consultants, educating producers and governments how to limit non-productive labor and increase productive labor.

Smith’s second elegant observation killed two birds with one stone. In the early days of industrialization, various pieces of machinery were operated by only a few select craftsmen (sometimes only a single person). Even though machinery helped to produce multiple copies of a product, the output was still limited by the number of craftsmen. Smith’s stroke of genius was to break down the manufacturing process into small pieces—requiring not only more specialized machines, but also a tremendous amount of new and specialized labor which took less time to be trained than the whole-product craftsmen. More of these specialized and rapidly trained jobs created both more output and more labor income… which consumed more of the newfangled products… which, in turn, stimulated manufacturers to add even more machines and even more labor…

Mass poverty was being rapidly eroded by mass labor and mass production. Smith’s ‘division of labor’ principles lit a roaring fire under economics, and changed the world in profound ways. But again, a warning: even before Smith surveyed the wondrous results of his insights that had spread like wildfire

throughout Europe and beyond, he had already glimpsed the ultimate and terrible consequences that would, one day, cast a corrupting shadow upon all this achievement. He saw that the very act of the division of labor would ultimately lead the laboring masses to grow “stupid and ignorant”. In Wealth of Nations:

“The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention...”

“He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. Of the great and extensive interests of his country he is altogether incapable of judging...”

“The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life... It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues.”

The principles of division of labor may have once solved a particular set of 18th Century problems, but these same reductionist-based principles may have planted seeds to new problems which now come to blossom in our 21st Century. As discussed earlier with the “mismatch which exists between what science knows and what business does” findings of Dan Pink, we are inheritors of a business paradigm which is often incapable of adapting to even rudimentary requirements of cognition. Because of our incessant need to reduce anything and everything into its most insignificant components, humanity too often loses its capacity to see the more significant picture: to play with puzzles.

FIGURE 19


A second modern casualty of Smith’s ‘division of labor’ principles, involves the question of how society as a whole either is self-aware and intentionally utilizes automation to seek out new experiences, or is forced back on its heels to persistently react to the labor demand consequences of automation. Resultantly, the essential management of labor demand is too often misunderstood or ignored by society as a whole. As society misunderstands or ignores one particular aspect of socio-economic principles, multiple other threads of societal fabric may also be affected.

Perhaps a truer reason why global economies are in extremis, is because at the core of who we are as a society, we still view ourselves from Smith’s ‘division of labor’ lens. Distinctly separate, even alienated, from one another—one group or culture being somehow better and more deserving than another. This historical commitment to separateness infiltrates and poisons everything we do, everything we think and observe, every job we undertake and create, every innovation we produce, and every law we enact. If humanity is to pull itself from the edge of a cliff, and truly find a resolution to the global economic crisis—we proffer that it will require all of humanity to finally turn away from this ‘division of labor’ view of economics, and embrace humanity’s natural state of interdependence.

To illustrate how humanity still reflexively infects its own ‘division of labor’ dysfunctions into 21st Century economics, we begin with a 2010 TED Talk; then, we wind back to 1971 to view a debate between two heavyweights of modern philosophy; and finally, we wind forward to the business and social ethics embodied within a day-care center for children.

The masses: apathetic, or precluded?In 2010, a Canadian community organizer, Dave

Meslin, presented a ‘TED Talk’ (www.ted.com) titled The Antidote to Apathy. His presentation questioned the validity of the ‘common wisdom’ that real substantial change is not possible because the public masses are “too selfish, too stupid, and too lazy”; that they simply do not care. Rather, Meslin’s wider observation is that government officials “actively discourage engagement” of the masses by intentionally designing and placing obstacles and barriers throughout the system, and he provides three pictorial examples (Figure 20: the pixel quality of the following video captures is poor). The top picture of Figure 20 shows a typical city administration ‘public notice’ newspaper advertisement—seemingly purposefully constructed to be complex and discouraging. The middle picture shows if corporations published ads in the same manner, consumers would have a difficult time discerning exactly what was being marketed. The bottom picture shows what an ad would look like if a government administration would truly desire active public participation.

FIGURE 20

Whether the example is of the disenfranchising manner in which city public notices are advertised, or of the paternalistic and indiscernible manner in which laws and regulations are generally written within any government, or of the Kafkaesque machinations that exemplify our justice systems—our institutions of government are both distant from the masses, and precisely like the global banking system of today: too big to fail, and too big to save. But we must also consider this uncomfortable view of the masses: we are just the same. As we have been divided by the system, we thus divide ourselves. We, too, intentionally place obstacles

http://www.ted.com


and barriers between ourselves and those elements in life which we desire to eschew. Modern-day French philosopher Michel Foucault dedicated much of his life to the examination of the ‘dividing practices’ that society embodies within itself. His most famous examples are the isolation of lepers, the confinement of the poor and insane, the segregation of the infirm into hospitals and the unlawful into prisons, and the stigmatization of sexual or cultural deviance. In short, Foucault argues that ‘dividing practices’ serve not only to banish from our sight these uncomfortable aspects of a society, but also defines our personal and social identities (healthy vs. unhealthy; conforming vs. non-conforming; them vs. us; rich vs. middle-class and poor; professional vs. domestic servant, etc.).

As we segregate the infirm into hospitals, we intentionally deny ourselves the responsibility (some might even say the sacred opportunity) to more directly care for the infirm and elderly. Emerging data suggests that the number of people needing care have already exceeded the number of trained care givers. Why is it not the social norm, as an example, for someone who is recovering from, say, a medical operation, to recover in the warmth and energy of a volunteer’s personal home? Why has society confined this fairly elementary service to the cold and sterile environs of a hospital room? Why is it not the social norm for someone who has lost their source of employment to share a meal with a neighbor? Why has society confined this modest service to some state institution or charity organization? Why has society essentially substituted its ‘natural responsibilities’ with financial donations made to some segregated institution that performs these responsibilities on its behalf? Why do large corporations establish independent organizations to conduct their charitable activities, rather than these activities exist as a core and daily obligation of the corporate owners and employees? These very same ‘dividing practices’ existing within our individual selves and how we feel discomforted by various experiences of society, then, plays out in the more complex manifestations of political and economic affairs and the divisions between, say, American markets vs. European markets, Judeo-Christians vs. Muslims, even Northern vs. Southern states.

Adam Smith’s insight to divide labor tasks into more efficient components certainly did help to expand the opportunities and reach of industrialization—in a profound and life-changing way. But in the 21st Century, humanity must manage much more complex, interwoven, subtle, cognitive tasks that require trans-disciplinary approaches and collaboration. The 18th Century dividing principles we experience in our modern workplaces, regrettably, we have come to replicate throughout our socio-political systems. Consequently, it should be of no surprise that society is divided in both its humanity as well as its economy.

The masses: put in a box, or self-creating the box?There are two antithetical ways in which we as

human beings experience the ‘invisible hand’ and ‘division of labor’ influences within economic markets (and the world in general), and then attempt to interpret these experiences within our existing worldview or belief system. Either, we believe that markets influence and inherently modify our very beings—that the market happens to us. Or, we believe that the markets are influenced and can inherently be modified as a consequence of our individual and collective wills—that the market happens from us.

In a 1971 debate with Foucault and Noam Chomsky, Human Nature: Justice versus Power, Chomsky takes the first view: that it is essentially the coercive power of institutions which limit intrinsic human creativity. “A fundamental element of human nature is the need for creative work, for creative inquiry, for free creation without the arbitrary limiting effect of coercive institutions, then, of course, it will follow that a decent society should maximize the possibilities for this fundamental human characteristic to be realized. That means trying to overcome the elements of repression and oppression and destruction and coercion that exist in any existing society, ours for example, as a historical residue. Now any form of coercion or repression, any form of autocratic control of some domain of existence, let’s say, private ownership of capital or state control of some aspects of human life, any such autocratic restriction on some area of human endeavor, can be justified, if at all, only in terms of the need for subsistence, or the need for survival, or the need for defense against some horrible fate or something of that sort. It cannot be justified intrinsically. Rather it must be overcome and eliminated.”

Foucault disagrees with this ‘institutions influence us’ approach because almost every institution that exists throughout all aspects of human civilization does so for the inherent purpose to perpetuate some articulated or unarticulated (conscious or subconscious) will of society. Thus, in the debate, Foucault takes us on the ‘long way around’ to the question of the relationship between political power and society.

“One of the tasks that seems immediate and urgent to me, over and above anything else, is this: that we should indicate and show up, even where they are hidden, all the relationships of political power which actually control the social body and oppress or repress it. What I want to say is this: it is the custom, at least in European society, to consider that power is localized in the hands of the government and that it is exercised through a certain number of particular institutions, such as the administration, the police, the army, and the apparatus of the state. One knows that all these institutions are made to elaborate and to transmit a certain number of decisions, in the name of


the nation or of the state, to have them applied and to punish those who don’t obey. But I believe that political power also exercises itself through the mediation of a certain number of institutions which look as if they have nothing in common with the political power, and as if they are independent of it, while they are not. One knows this in relation to the family; and one knows that the university and in a general way, all teaching systems, which appear simply to disseminate knowledge, are made to maintain a certain social class in power; and to exclude the instruments of power of another social class. Institutions of knowledge, of foresight and care, such as medicine, also help to support the political power. It’s also obvious, even to the point of scandal, in certain cases related to psychiatry.”

The ‘long way around’ that Foucault takes us, ultimately leads us to this destination: society either directly or indirectly creates any and all institutions and their resulting policies as a direct consequence of society’s need to have institutions control society rather than society, on an individual and collective level, control itself (Foucault derives a fair amount of his philosophical tendencies from Immanuel Kant). Throughout history, society has tended to appoint institutions to enact the general will of the people. Two problems, then, arise from our choices:

Firstly, we abdicate our natural responsibilities to someone else. This ‘division of labor’ approach may, at first glance, seem an efficient way of managing the affairs of society. But, as we have seen throughout the experiences of our lives, our ‘separatist’ worldview can also do us harm. And secondly, over the centuries, we have simply lost consciousness of the underlying philosophies, intentions, and cultural norms that are imbedded into our institutions, our market economies, and our entire way of life. We have inherited, but we have not comprehended what we have inherited. Indeed, since we have long ago forgotten these deeper and esoteric questions of humanity, it now only has the appearance that certain institutions coerce society or that we are victim to the greed of the rich. But the undeniable reality is that it is us, ourselves, who breathe life and power into political institutions and economic markets alike.

We are in the system and the system is in us. We have been divided into individual productive units for the sake of profit only because we have chosen not to join together in collaborative and interdependent endeavors for the sake of pure experience. Wall Street bankers and inept government officials have not led us to the cliff of economic ruin. We have all led ourselves into crisis.

The masses: natural rights & natural responsibilitiesSo, to put the above Foucault and Chomsky debate

in example form: in his book, What Money Can’t Buy: The Moral Limits of Markets, Harvard University professor

Michael Sandel recounts the story of a day-care center, which responded to a problem of parents arriving late to collect their children by introducing punitive fines. But the result of the fines was that late pick-ups actually increased. Parents still arrived late, paid the fine, and just went on with life. Sandel, like Chomsky before him, argues that some external life-force imbued within the soul and institutions of the markets—like Satan himself—is responsible for corrupting the natural and moral idea of collective responsibility. Once the old ‘norm’ of arriving on time at the day-care center had been monetized, according to Sandel, it was impossible to change back. But this attitude only enables our individual and societal sense of victimhood.

If we look at U.S. consumers, and how they make decisions to purchase automobiles, we see the consequences of where our ‘moral compass’ is pointing. In 2008, building up to the tsunami of the 2008 recession, gas prices hit an average of US$ 4.40—and SUV sales declined 34 percent from the previous year. Once gas prices had fallen back to about US$ 3.70 in 2011, though, SUV sales recovered to a whopping 46.6 percent growth rate from 2010. Does this data suggest that market demons hidden within gas prices somehow possessed American consumers and compelled their purchasing decisions to buy SUVs?

FIGURE 21

Or, if we care to look a bit deeper into human consciousness, do we ultimately find that it is our larger philosophical precepts relating to the casual attitude we have with nature that determines how we prioritize


our economic behavior? Or, perhaps it is simpler: that some element of personal insecurity or lack of self-esteem exists within each of us, and one particular mechanism we sometimes adopt to compensate for this insecurity is to acquire some materialistic ornament so as to render some normative identity to ourselves and to others around us? The ghost in the machine is not some external life-force; it is, inescapably, ourselves.

Throughout the centuries, we have adopted the belief that the human race is divinely imbued with the power to dominate nature, and thus we are somehow expressly designed to be above or separate from nature. It is this essential belief system of separateness, of our own personal elitism—rather than some external coercive power of demonic and capitalistic institutions and markets—that actually determines our socio-political and socio-economic activities. Do we really think that if we raise taxes high enough, this will somehow transform a portion of society’s inherent psychology to stop smoking cigarettes? Or, do we more wisely realize that any personal activity—whether smoking, or writing poetry, or committing murder—is given life from some intrinsic quality existing within both the individual person as well as the whole of humanity? Isn’t the individual simply a mirror image of the societal whole; isn’t the societal whole simply a mirror image of the individual?

Is it possible the owners of the day-care center story Sandel recounts—in a misguided effort to resolve what they saw to be a collective responsibility failure by their clients—are the ones actually responsible for projecting a ‘monetizing’ solution into the problem? What if the owners had simply sat down with their clients to discuss the human elements of what was happening—and as a result of this more human dynamic, the community discovered some collaborative approach which addressed not the symptom of the problem (lateness), but the problem itself (the day-to-day dynamics of child care)? Perhaps someone in the community might have been inspired to start an in-house arts and crafts project for children, or established a collaborative arrangement with active elderly volunteers (helping both young and old). The lesson here: the knee-jerk reaction to consistently blame markets rather than ourselves, often blinds us in our ability to see unexplored possibilities just waiting for us in our own consciousness.

A mere 13 years after the revolutionary births of American republicanism and Adam Smith’s mass liberation of the laboring class, the very sovereignty of the British monarchy—and governance itself—was now in mortal peril. The common man had been liberated from poverty and slavery—but now wanted more. The common man wanted ‘natural rights’—rights that originate from life itself, rather than from some self-appointed governor or law, no matter how benevolent. The genie had to be put back in the bottle, and quickly.

In the year 1790, the political theorist and philosopher Edmund Burke published Reflections on the Revolution in France—and perhaps no other document or philosophy has had such an enduring and crippling impact upon how ruling elites view the masses within a modern-era government… and how the masses, still today, have continued to cower from their own ‘natural responsibilities’. Edmund Burke had adopted much of Plato’s ancient philosophies of how individuals, societies, and governments should operate. Namely, that the most preferred form of governance was an aristocracy led by a philosopher-king... and the least preferred was a democracy because this would inevitably lead to tyranny. In Plato’s and Burke’s view, the masses were generally poor, uneducated, and prone to drunken populist emotions. Thus, if these drunken masses would attempt to participate in a democracy, the system would eventually break down into nothing short of tyranny. Burke’s impassioned Reflection on the Revolution of France painted a picture so dire for England if she, too, succumbed, and allowed the drunken devil of democracy to enter the sacred folds of her skirts: Chaos! Nothing but abstractions! “‘What is the use of discussing a man’s abstract right to food or to medicine?” Burke unreservedly praised the divine sanctity of King George III and the sober practicality of royalism.

Burke’s coup de grâce which still haunts us today: “Government should be a matter of prudential [professionally trained] management and practical statesmanship practiced by the aristocratic class [because of their assets and responsibilities; only they have a real stake in the future of a nation]… rather than rule by abstract [philosophical/transcendental] principle.” Because the masses were incapable of exercising ‘natural responsibilities’, they were not to be granted ‘natural rights’.

The belief that the masses are intellectually incapable to undertake self-control—and that they needed to be led by some form of elitist control—still permeates our societies today. Even on a more organic level, a second major theme of Plato—which Burke also venerated—was that society was naturally divided into three distinct castes, or classes. Rulers or Philosopher Kings: those who are intelligent, rational, self-controlled, in love with wisdom, well suited to make decisions for the community. These correspond to the ‘reason’ part of the soul and are very few. Warriors or Guardians: those who are strong, adventurous, and brave; in the armed forces. These correspond to the ‘spirit’ part of the soul. Workers: laborers, carpenters, plumbers, masons, merchants, farmers, etc. These correspond to the ‘appetite’ part of the soul.

Certainly, we can see that this reductionist view of the human species is effectively dehumanizing—all of us can possess a mixture of all three of these aspects of psychology and behavior at any given time. We are much


more subtle and composite than Plato or Burke believe us to be. We do not have to be compartmentalized into behavioral and social boxes. We do not have to be governed by some external force of power. We can govern ourselves.

As we attempt to synthesize: (a) Adams Smith’s division of labor principles of 18th Century economics; (b) the elitist-separatist philosophies of Burke; and (c) our own socially detached and isolationist practices examined by Foucault—and how these esoteric abstractions tangibly impact the economic crises now leading us all over the cliff—the synthesis leads us to an essential realization. Substantial change in our economic systems and in our social institutions can never be achieved simply by institutional reforms… by electing new politicians, or writing more laws and regulations, or creating new jobs, or raising or lowering taxes, or bailing out more banks or even entire industries, or printing more trillions in money, or even eliminating money altogether, or drilling for more oil, or instituting only clean energy use, or building hundreds of eco-friendly cities, or converting the world to a single religion, or implementing any other tangible ‘real world’ reform.

Tools that might have been effective in the early stages of industrialization are no longer effective in our post-industrial age. Repeating the same thing over and over again can never produce different results.

FIGURE 22

The effects of repeated action

The global economic crisis is much deeper than that. The actual crisis—at its true core—is about how we individually and collectively define and experience our own authentic identities; our essential states of consciousness; and then, how we manifest our states of consciousness into economic activity. Can we not finally admit that we are the economic markets and that they are not separate from us? Can we not finally admit that dysfunctional governments and greedy corporations are nothing more than physical manifestations of who we are as a human race? Can we not finally admit that we are the problem? Will we ever possess the courage to admit that some external life-force does not control our lives and destiny; that we, both individually and collectively, possess the already existent capacity to seek the wisdom inherent within any moment, of any circumstance, and then intentionally manifest that wisdom?

If we finally come to terms with and accept our ‘natural responsibilities’, then we will finally comprehend that substantial change and the end to the global crises that plague us, can only occur when we transform ourselves—individually and collectively. Then, and only then, might we deserve our ‘natural rights’. The choice is entirely ours.

l

Throughout this section dissecting Adam Smith’s two oft parroted principles of self-interest and division of labor, we have sought to examine not simply how markets operate, but more pointedly, for what general purpose do they operate? The 21st Century has blindly adopted specific tools of economics which were designed to resolve problems in the 18th Century. Then, the general purpose of market economics was to rapidly and efficiently facilitate the sovereignty of domestic national markets against that of foreign markets. But in our 21st Century, the protection of a domestic national economy essentially contradicts our evolution into a globalized marketplace.

Meanwhile, in the fog of confusion as to how society at large ultimately decides to manifest either national or global economies, self-interest-driven stateless corporations operate without allegiance to any culture other than the culture of profit. Day-to-day operations of industry and commerce spin their wheels attempting to become more operationally efficient—and do ‘survival of the fittest’ battle with each other to divide and conquer markets which, if truth be told, are essentially stagnant. Consumer markets are overflowing with a blur of ‘brands’ that provide few, if any, true innovation to stimulate communities of people to expand standards of living for society as a whole. Businesses and labor remain shackled to outdated paradigms of operations and incentives—even though science has provided them with superior alternatives.


Agrarian societies have evolved into mass-production societies, and in turn, have evolved into post-industrial service societies. But then, the evolution has suddenly stopped. We now consume for no real purpose other than to consume. The entirety of world economies has crowded into a single consuming pasture, destroying the seeds of our very future. Meanwhile, the virus of financialization and our addiction to debt has further decimated our social bodies, creative minds, and empathic hearts. John Maynard Keynes’ original observations of a society’s ‘propensity to consume’ versus ‘propensity to save’, have now grown essentially irrelevant. We may slowly be awakening to the realization that the masses can never consume their way into prosperity. Governments no longer control money supplies or other traditional levers of power; they can only perform in their own isolated and farcical theatre play. No one truly knows what is in store for us if the global economic crisis gets any worse. No one wants to even consider that a collapse of global systems is truly possible. Humanity holds its breath. We stand on the edge of a cliff. We wait for a miracle.

Adam Smith, in and for his age of the 18th Century, was a visionary, constructive, and potent force for guiding industrialization through its adolescence. His contributions to both sociology and economics should never be dishonored. But his insights of unrestrained self-interest and division of labor that then advanced so much of the world, have long since turned against us—corrupting the very fabric of our economy and humanity. It is now time to relegate to history his 18th Century precepts which allowed our ancestors to rapidly grow their domestic national economies, but now have come to both divide and disorient the 21st Century. Smith’s modern-day champions—Ayn Rand and all those that worship her and Smith for their own selfish gain—need to finally acknowledge that the world has evolved; that the marketplace is no longer that quaint food market. An increasing number of the challenges of life can no longer be met with reductionist division of labor doctrines and corporate centers of control. Trans-disciplinary and creative resources are now required to move seamlessly throughout distributive networks and entangled cross-border puzzles.

The Tunisian economist and philosopher, Ibn Khaldun, in 1377 wrote in First Law of Historical Cycles:

“Civilizations must go through four stages: the first stage is the emergence of a new civilization and society. The second stage covers a period of growth and prosperity. Stagnation and decadence characterize the third stage where wealth can no longer increase. This brings us to a fourth stage of decline leading to the ultimate collapse. Finally, a new civilization emerges from the ashes of the previous one and another cycle is born. The conditions of the world and of the nations do not persist in one unchanging state, but are transformed

with the passage of time and move from one condition to another.”

We certainly now appear to have moved into this third stage of civilization and its stagnation and decadence. Governance, society, and economic markets degenerate together. The question, then, becomes: do we desire to continue on the inevitable path to the fourth stage of collapse—for our economies and our entire societies to literally jump off the cliff?

Or perhaps, do we desire to establish a new civilization imbued with both ‘natural rights’ as well as ‘natural responsibilities’—replete with a sustainable and interdependent economic system and a wiser, more inclusive form of governance—without necessarily needing to experience a complete and catastrophic collapse of the present system? Can we recognize the Titanic is sinking, and before she sinks completely, can humanity join together to build Noah’s ark? If so, to what ideal as a human race do we endeavor? How should we begin anew?

Principles of Global Interdependence

Prolegomena

Defining the problem & solution

It is perhaps natural that the question arises: why has it been necessary for this thesis to delve so

particularly into what the authors argue are the fundamental problems underpinning the present global economic crisis? Certainly, it would be easier to digest and profoundly more elegant if we had simply proffered whatever solution to the crisis we believed feasible. There is truth to this sentiment.

Yet, since the present global crisis first took tangible form in 2008, political and business leaders, economists, journalists, and lay persons, have all vocalized their multifarious interpretations to the underlying causes of the crisis (and sometimes, their resolutions as well)—to the degree that the very definition of the problem has simply become unintelligible, if not intellectually misleading. Many have classified the crisis as nothing more than a liquidity problem; while others, a solvency problem. Many have pointed the finger of blame at government spending; while others, at tax inequality.

Each of these interpretations could inevitably lead to the enactment of specific and sweeping laws and regulations—and these actions could have profound negative or positive implications for society and economic markets throughout the world. Win or lose, the stakes are immense—the lives and prosperity, perhaps even the very liberties of entire populations could be affected. In its present state of crisis dialoguing, it could come down to nothing more than the influence of power,


rather than informed wisdom, which determines the path the world takes. Or worse, a vacuum of power and resulting inaction could perhaps lead to catastrophic consequences. As this thesis has revealed, various recognized experts in economics and public policy can often have a fundamental misunderstanding of the rudimentary mechanics of economics (e.g. what institutions presently create the money supply). We do not mean to be scurrilous, but in light of the fact that so many of our experts and world leaders are operating from outdated knowledge, it is not unreasonable to ask: does anyone really know what is going on? Since an informed wisdom approach to resolving the crisis would ostensibly require engagement of the masses, we felt that it was vital to provide the masses with a transcendental perspective to the economic, social, historical, even philosophical components of the crisis.

Our fundamental disagreement with the cacophonous interpretations presently infecting the blur of speeches, airwaves, and internet coverage, is that these interpretations address only the symptoms of a much more labyrinthine dilemma. If the problems had been as bi-dimensional as so far portrayed by the powers-that-be, we would have already chosen and enacted the magical solution. Indeed, a number of remedies have already been administered—ranging from massive central bank infusions of liquidity (to combat a perceived liquidity problem), to draconian cuts in government spending (to combat a perceived solvency problem). But here we still are, and the crisis is actually growing more chronic and malignant every day. Our view is the solutions being deployed have not been addressing the true problem.

The true central economic problem is that in an affluent society, the services sector simply cannot generate aggregate demand throughout the masses. The true central sociological problem is that in an affluent society, humanity has grown stagnant, even decadent. Combine these two illuminations together, and it becomes clear that the crisis is much more complex than we realize. Doctrines and tools established in the 18th Century simply can no longer serve humanity. Global societies and their economies now require a fundamentally new path. Thus, presenting a more dialectic view of the crisis has been our rationale to dissect what we have in this thesis, and how we have conducted the dissection.

This, then, leads to: how to address a possible solution which the authors believe to be both feasible and evolutionary in its approach to resolve the global economic crisis. Since a dominant critique made thus far in this thesis is that symptoms, rather than core problems, are presently being addressed—it stands to reason that we endeavor herein to formulate a solution which addresses the central aspects of the crisis, rather than just the symptoms. Consequently, we must first

stand back for a moment, and address two preliminary issues: (a) a statement of the fundamental objective of a solution; and (b) a statement of what tools or tactics will this objective require.

The objective of the solution we propose herein is this: to provide a framework for the entire human race to finally be empowered to participate in—and take direct responsibility for—a globalized paradigm which achieves market equilibrium through a process of socio-economic interdependence. With this framework in place, and global interdependence achieved, the central problems of the global economic crisis are addressed.

The tools and tactics we propose herein are a hybrid of already existing tools and tactics and radically new tools and tactics. By utilizing a hybrid approach, interlocutors will be provided some comfort level as they venture into the more radical environs of socio-economic interdependence.

Genesis of socio-economic interdependenceIn 1997, Michael Byrnes was provided the

opportunity to live and work in post-conflict Bosnia-Herzegovina. There, he observed, first-hand, and for nine years, how a society of people attempts to build something from nothing. The international development community—hundreds of multinational organizations and NGOs—they all descended upon this newborn of Bosnia like locusts in a plague.

Today, after more than 17 years of developmental assistance and tens of billions of dollars in sovereign debt, grants, and investments, Bosnia still drowns in the quagmire of its own making and the making of the international community. One cannot spend nine years in such a dystopia, and not be challenged to struggle with these human and economic demons; to attempt to find some alternative to the nightmare we call economic crisis. As a consequence of this struggle, Byrnes wrote Hands & Brains Unbound. This is where the initial concepts of socio-economic interdependence were first sketched out—predominately establishing a process and infrastructure for a ‘global Marshall Plan’. The general principles first established in Hands & Brains Unbound, for purposes of accessibility, have been abridged somewhat for this thesis.

General principles of interdependence

Beyond the tertiary sector: the fourth horizonIt is now clear that our affluence-based economy

can no longer be sustainable operating primarily in the tertiary services sector. Global markets will need to establish and nurture a fourth horizon which—due entirely to its natural magnetism—pulls into its environs new labor, new capital, and new socio-economic paradigms (rather than subjectively pushes resources and doctrines into a new sector). So, what could or should be


the form and function of this quaternary sector? Here, we need to proceed with caution, for several reasons. Firstly, the term quaternary sector already exists in various government standardization literature (such as Standard Industrial Classification Manual, 1972), which defines quaternary sector to include: finance, insurance, real estate services, and public administration. However, various U.S. institutions, and most other nations still recognize these tasks being included in the tertiary services sector. Finance, insurance, real estate services, and public administration services are not functionally or consequentially different than the other tertiary services (transportation, electric, gas, sanitation, wholesale trade, and retail trade). Thus, this thesis places the tasks listed above back within the environs of the services (tertiary) sector.

The second reason for caution is that for too long, the masses have often been coerced, even forced, to adopt various ‘national interests’ of import—be they ‘wars against communism’, ‘wars against imperialism’, ‘races to the moon’, ‘wars against terror’, and the like. Yet, herein, we need to proffer some embarkation point, some strongly attracting magnet which could serve two specific purposes: (a) inspire a worldwide dialogue on this subject of establishing and nurturing a quaternary sector; and (b) we recognize that any new socio-economic paradigm would almost inevitably operate from strange new perspectives and objectives (assuming we finally unshackle ourselves from 18th Century doctrines). Thus, the remainder of this thesis explores an imagination as to how this quaternary paradigm might operate.

But again, the world’s masses have for too long been disenfranchised from designing their own destiny. It is vital that the masses finally unify together to undertake both their ‘natural responsibilities’ as well as their ‘natural rights’. And further to this point, any new quaternary sector will inevitably require the active day-to-day participation not of powerful governments, nor leaders of industry, but rather, of the entirety of the masses. New wealth will spring from this quaternary sector not only from investment into an enlivened and wiser corporate sector, but also from investment into any and all individuals—anywhere and everywhere throughout the world. True empowerment and entanglement throughout all the masses will be the powerful new creators of wealth. Wealth, itself, will take on a new meaning. The fourth horizon will reflect and amplify anything and everything we choose to bequeath to ourselves and the future. Consequently, the masses will be required to awaken their fullest potentialities.

A final reason for caution is that we do not want to set into motion any socio-economic alternative for the explicit and exclusive purpose of resolving a crisis, no matter how crippling the crisis may be. If that were

the case, we would simply be committing the very same mistakes as our 18th Century ancestors. Any socio-economic alternative—especially the alternative we shall explore below—will require us to heed the sentiments of the British essayist, James Burke. His view of history and social behavior is one that comprehends humanity has been habitually driven by three entwined influences: (a) we base many of our practices and institutions upon ‘knowledge’ which we blindly accept as true, but indeed, we later discover to be untrue; (b) we attempt to solve problems with pre-existing tools, which may not be effective, and sometimes, may actually do harm; and (c) we have abided by reductionist worldviews for so long, we have long ago forgotten to simply enjoy the natural awe and wonder of the universal puzzle. We so much want to be in control of the uncontrollable.

Perhaps the most poignant method to begin to envision what a fourth horizon might look like, in Figure 23, we contrast two photographs of our youth today. The top photograph symbolizes the self-centered nature of affluence and its stagnation: mindless consumerism. The bottom photograph symbolizes the awe-inspiring nature of direct engagement with the very life-forces of the universe itself: an undersea adventure. To which countenance do we aspire?

FIGURE 23


German philosopher Immanuel Kant, generations after his entombment, still challenges all of humanity with an immortal imperative: if an action is not done with the motive of duty, then it is without moral value. This call to duty raises both clear yet elusive energies that light the fires of our human existence. On one hand, as the two above contrasting pictures of children’s’ faces might suggest, it is difficult to discern any real moral value or duty in the act itself of consumption. The second picture, however, clearly reveals the human sense of awe and sublimity that flows through us when we perform an act of duty. Kant’s penetrating maxim: Sapere Aude—dare to be wise; dare to know. The elusive challenge of this imperative, however: duty to whom, or to what?

A fervent nationalist might easily submit that duty is an act of patriotism. A devout practitioner of religious convictions might acclaim that duty is an act of faith. A Or a libertarian might declare that duty is an act of self-reliance. And perhaps this is the very intersection where we either part company and continue down the path toward the cliff, or join hands and invent a new path for ourselves. Throughout this thesis, the principle has been repeated that aggregate demand generated throughout the masses could only occur if humanity sought something that was bigger—much bigger—than itself. Rationally, we can discern that nationalism, a single religion or race, or even extreme individualism, is by definition, an arbitrary division of humanity. Thus, we either remain trapped on our long-held path of exclusion and separateness (that cliff thing), or we finally accept that all of us are simply diverse colors in a universal painting (this diversity perhaps, is also our salvation).

This ‘we are all one’ sentiment does not mean in the least that we relinquish the uniqueness of any particular culture or individual. If the uniqueness is indeed authentic rather than normative, the uniqueness strengthens the fabric of our individual and collective endeavors. The subtle point to be made here is that each particular culture has incessantly proclaimed its identity by virtue of its differentiation from some other culture (this is normative, not authentic). Like a painter’s palette, life is full of color—and it requires diverse colors to paint a picture (even if the picture is comprised of only two colors: a foreground and background color). The color red is not red simply because it is not the color blue. There is something inherent within the color red that makes it red. We have been so conditioned on defending our own specific color, or own specific identity, that we have long forgotten what was the larger painting. Perhaps Kant’s challenge to us of duty is nothing more or nothing less than duty to ourselves and to each other.

So, with the above caveats affirmed, we proffer that a reasonable embarkation point for a global dialogue

amongst the masses regarding the establishment and nurturing of a quaternary economic paradigm: the collaborative experience of human exploration of our universe. For each and every one of us, to wisely explore outer space, the oceans, mountain ranges and valleys, even our own backyards. Each one of us will spontaneously move back and forth throughout diverse dimensions: one day being a student, the next being a teacher; one day being an entrepreneur, the next doing nothing more than being at peace with nature. Instead of attempting to resuscitate our dying man-made artifacts of ‘exploring-in-comfort’ amusement parks, we boldly seek out nature’s own amusement park.

FIGURE 24

Consequently, the masses who presently stagnate in the contaminated stream of mindless consumerism; who provide services to feed nothing more than stagnation and decadence—can be drawn into a torrential existence more fulfilling, challenging, and even honorable. Figure 25 illustrates how aggressively reallocating labor and resources into the quaternary sector would affect the overall makeup of our global economy.

FIGURE 25


Figure 25, firstly, shows an immediate and aggressive reallocation of human labor and capital resources which would be magnetized to flow into the quaternary sector of wise exploration: by 2015, 7 percent (mean average) of the global labor force would be operating within the quaternary sector, and this aggressively rises to 12 percent in 2020, and up to about 50 percent of the labor force by 2040. This would obviously draw down the present 62.9 percent operating in the tertiary sector to 28 percent by 2040. Manufacturing would see a temporary rise from its present 31 percent to 40 percent so as to produce any necessary large-scale equipment for space, oceanic, and terrestrial exploration—but this would eventually decrease to 15 percent by 2040, as a consequence of advanced automation and robotics. Agriculture would likely remain constant at 7 percent (mean average) of the global labor force.

These figures would obviously have a profound impact upon aggregate output and wealth creation—but this will be addressed later in this thesis. Now, we shall explore how humanity will be challenged to operate throughout this fourth horizon.

Human & organizational entanglementFew in the world today have ever experienced

life outside the confines of a pigeonhole. Since the beginning, the human species has either operated within the shackles of outright slavery, or we have subsisted within corporate doctrines that compartmentalizes and coerces from us our labor and human value (heedlessly, we have considered human and labor value to be one and the same). For too long, governments and corporations have attempted to pre-determine the outcome of labor output as well as production output. But, if we had the chance to give birth to the largely untapped reservoirs of talent and potentiality residing naturally within each human being, and truly empower that potentiality—we would then have ourselves a whole new ballgame.

FIGURE 26

i. Authentic identity & entanglementWe do not even understand our own identities. Due

in large part to our blind adoption of Adam Smith’s ‘division of labor’ precepts, individuals are born, live, and die believing that their compartmentalized skill sets define their very identity. We have been trained to identify ourselves simply by our professions and titles; essentially, the way in which we economically contribute to society. But we are much greater that mere professions and titles. The ‘system’, however, doesn’t really encourage or facilitate our more creative and spontaneous potentialities. As Dan Pink and others have observed, corporations operate from an extremely limited scope of purpose; pondering transcendental puzzles certainly does not fit in with ‘real world’ corporate objectives to increase profits. From the beginning, we are trained to fit into someone else’s pre-defined pigeonholes. Our very identities, then, become compartmentalized into monotonous boxes—just a cog in some machine that we can’t even see.

But there is much more beneath the tip of the iceberg than our compartmentalized professions. On a moment-to-moment basis, we can contribute an infinite wealth of experiences and ideas, our curiosity, even the professional and social contacts we accumulate. The piece of puzzle that, for generations, has been missing from value and wealth generation, is how might a socio-economic paradigm tangibly facilitate and be sustained by the transcendental aspects of human potentiality. How can any socio-economic paradigm be so dynamic and fluid that in one moment, our individual value is identified by some tangible economic output, and in another moment, our individual value is identified by an act of empathy as a restaurant customer shares an old family recipe with a restaurant owner?

At present, the overwhelming majority of corporate organizations do not even consider that vast resources of potential are residing within their employees; they see their employees only as compartmentalized tools to achieve a specific set of tasks. But the mirror image of this is also true: individual employees do not even consider how the vast resources of the corporate organization might be of help to their individual goals and aspirations (other than economic-specific benefits of pay-checks, insurance, retirement pensions, etc.). Consider these two examples: how a hand-made sweater can change a company’s fortunes, and how a relationship between customer and restaurant owner can transform the very fabric of an entire community of people. The purpose of these two brief examples is to provide us with a deeper understanding of how we have been allowing our very economies to stagnate by not paying attention to our day-to-day and moment-to-moment authentic identities. So much continues to go to waste.

One day, in a corporate cafeteria, a young female


computer programmer carries her food tray to a table and sits nearby to a small group from the company’s marketing department. After several minutes, she overhears a portion of one of the marketing executives complaining that sales of a particular line of women’s sweaters are performing badly. The young computer programmer interrupts the marketing team’s conversation by saying: “My mother gave me this sweater for graduation. Her mother had given it to my mother as a wedding gift... and my great-grandmother had given it to my grandmother when she emigrated from her home country. Every time I wear it, I think of all the memories of their lives... and the memories to come.” Later that day, the marketing team huddles and recounts the computer engineer’s story of the inherited sweater, and designs a new advertising campaign around the idea of a sweater... its intimacy... the memories it conjures. Like a fairy tale, the new ad campaign is a smashing success. The corporation earns wondrous amounts of revenues. Shareholders are happy.

Question: what value, exactly, did the young computer engineer contribute to the company in her telling of a personal story? Did the corporation ever look upon this young computer programmer as anything other than a computer programmer —a compartmentalized tool in a pigeon-hole? Was she seen perhaps, as someone whose very life experiences were of value... or perhaps, as someone with a personal network that could be beneficial to the company as a whole? Answer: even if a corporation’s owners might have a genuine empathy for its employees, corporations simply do not have the infrastructure in place capable of systematically seeking out (let alone quantifying) the greater potentiality of its workforce, or conversely, capable of providing its workforce with access to the corporation’s assets for the individual benefit of the employee. Somehow, we’ve all adopted the reductionist law of life is to only seek the shortest route to profits possible—the narrowest view possible. That somehow, when we finally arrive at the top of the heap, happiness will be there waiting for us. This dream of ‘someday happiness’ is what motivates us to endure the dehumanizing rat race. But all along, the rat race is nothing more than a con game.

One day, in a typical restaurant, a customer receives a meal that, for whatever reason, is not to the liking of the customer (perhaps a recipe that tastes inauthentic). We can well imagine a series of responses by the customer as well as the service staff and restaurant owner—ranging from the customer leaving without paying the bill or loudly complaining, to the owner being defensive or rude. But envision an alternative scenario: the customer approaches the restaurant owner and says, “I can appreciate how difficult it is to implement a menu that pleases a diverse customer base... but I have an old family recipe that I would be happy to share with you. If it can be of help to you, please accept it.” And

in return, the restaurant owner graciously accepts from the customer the new recipe. Indeed, the new recipe is a hit—so much so, the restaurant can hardly keep up with the demand. As nothing more than an expression of gratitude, the restaurant owner provides a percentage of the expanding revenues to the contributing customer.

As a consequence of breaking though our old definitions of ‘customer’ and ‘restaurateur’, the contributing customer helps the restaurant establishes an online cooking class, where anyone can teach anyone a new dish. This, too, earns revenues to be shared—not just locally, but also globally. People in the local community, then, gather at the restaurant on a regular basis to discuss how local cultural recipes might be infused into other local restaurants (also generating new revenues to be shared). A new community activity is born: groups dining together in a rotating selection of personal homes and restaurants. Even local hotels get into the act by recommending to tourists that if they desire a truly exceptional meal and wonderful conversation with local families, they dine in the personal homes of local residents as well as at the established restaurants.

The original restaurant owner is not threatened by the growth of home group dining because the owner still receives a percentage of the revenue, no matter where the meal is served. And the original customer who started this whole adventure by sharing constructive guidance, is applying the resulting revenues (small amounts from multiple sources, which when aggregated, can be fairly significant), to seek even greater adventures. These two simple examples of a hand-made sweater and a food recipe demonstrate: Ѽ All of us, not simply corporations, have fallen into

the trap of compartmentalizing our very identities. When we dine in a restaurant, we intentionally isolate ourselves into a bubble... we don’t want to be bothered by anyone else, and we certainly don’t want to be served food which does not please us. We just want ‘order’ and ‘certainty’ in our lives. The funny thing about life, though: it is as a consequence of the unforeseen and spontaneous events that happen each and every moment, that many lives could be transformed, and new wealth opportunities could be born. If only we could allow ourselves the freedom to experience life, rather than protect ourselves from life.

Ѽ Our present economic system is simply not constructed to recognize or facilitate the untapped moment-to-moment potentiality of the vast ‘below the tip of the iceberg’ assets each one of us possesses. Keep our heads down, and our noses to the grindstone. Just do your job. That is the ‘real world’ message we indoctrinate into ourselves and our children. And this ‘real world’ view has nothing at all to do with our authentic identities.


FIGURE 27

Figure 27 illustrates the objective of the fourth horizon we stated earlier: empower all peoples of the world to experience socio-economic interdependence. To escape the predetermined pigeonholes. To fly and cross-pollinate with anything and everything. But, what exactly is interdependence? To answer this question, we must now pick from the toolbox, a radically new tool: quantum entanglement. Figure 28 illustrates what is referred to as a ‘Brunnian Link’—essentially scientists’ way of visualizing how the universe works on a sub-atomic level. We will apply this Brunnian link tool to the socio-economic engine of the quaternary sector.

FIGURE 28

Quantum entanglement is when two sub-atomic particles (photons, electrons, etc.) physically interact

with each other and then become separated. Even though the two particles can be separated by vast distances, the two particles act in precisely identical fashion. When one spins counter-clockwise, the other precisely spins counter-clockwise. When one gains momentum, the other gains momentum at precisely the same rate. It is as if the two quantum particles were somehow able to talk with each other across limitless space.

We submit that it is achievable for the human endeavors of the masses to operate in this same manner of entanglement. Someone, anywhere on the planet, may have a creative idea... while another person, on the opposite side of the planet, or right next door, may have access to resources which could make manifest that creative idea. At present, however, global economic systems do not have the technical infrastructure or operating processes in place which can encourage and facilitate this moment-to-moment entanglement. As a consequence of this missing infrastructure, an unfathomable number of wealth generating opportunities are simply unrealized. Thus, we propose to construct a global and organismic ‘lattice-work’ to tangibly entangle all of humanity. The Brunnian link illustrated in Figure 28 is simply a visualization tool which helps us to connect our ‘below the tip of the iceberg’ potentiality to each other. The purpose of establishing this concept of the Brunnian link is that the visualization can be translated into an econometric (mathematical) model. The model, then, becomes a preparatory way for us to explore the value and wealth consequences of entanglement as applied to the day-to-day mechanics of economic markets.

In Figure 28, four sets of ‘forks’ are linked together, each fork possessing two tines, one dark gray, and one light gray. So as to define and quantify a specific


economic transaction, we begin by assuming that the four forks represent four individual economic actors (a large corporation, a small business, a medium-sized collaborative network, and a single individual). Each fork has two tines, one incoming activity (acquisition of capital goods, know-how, or even an unsubstantiated idea), and one outgoing activity (sale of finished goods, know-how, or unsubstantiated idea). Thus, each of the four forks, or economic actors, are entangled in some way. This Brunnian model of four intersecting individual-entity forks, then, is referred to as a ‘node’. Thus, if a corporation is comprised of 400 employees, then 400 nodes would not only reflect the employee makeup of the corporation, they would also reflect 400 unique relationships with economic actors internal and external to the corporation. This translates to at least 160,000 unique individuals becoming entangled in a multitude of socio-economic activity (challenging the masses to finally transcend their propensity to seek ‘order’ and ‘certainty’). We will exemplify in practical term this entanglement activity (and the transcendence of the masses) just below. But first to complete the visualization of how Brunnian links entangle economic actors: these nodes just within a single sample corporation are arranged 3-dimensionally to each other—some overlapping one another, some merely touching each other, and others being somewhat distant from the rest (Figure 29). The permutations of these geometrically arranged human elements of potentiality within even a small sampling of economic actors—cannot be seen as linear or even exponential, but truly infinite.

FIGURE 29

To exemplify in practical terms how the Brunnian link socio-economic model would operate, we now must pick from the toolbox, a tool with which we are

somewhat familiar—but which we are now going to use in a radical way.

ii. Liberation of intellectual propertyOne of the more socially and legally charged aspects

of how the internet continues to impact the foundations of economic value relates to intellectual property (IP). Above and beyond the internet challenging conventional brick-and-mortar retail, the explosion of online piracy has severely disrupted the sovereignty of revenue channels for anything that can be digitized. On the other hand, however, it has been argued by some that conventional methods of appropriating IP protection artificially inflate the market prices to consumers. An example of this view: the patent process grants a patent holder an exclusive ownership of intellectual property for an average of 20 years—and thus, potentially prevents others to exploit the IP in a way that more rapidly decreases the market price to consumers. The most common criticism of the exclusivity of the patent process centers on the pharmaceutical industry—where patented drugs prevent lower-priced generic alternatives from entering the market, particularly in poverty-stricken regions. It seems an almost insurmountable quandary: protect the billions of dollars of research and development (R&D) investments made by corporations, or protect the starving and diseased who cannot afford such drugs.

But, there is another way of looking at the issue of intellectual property. Above and beyond IP that is patented, hidden within nearly every corporate enterprise is the know-how of integrating vast numbers of technologies, processing techniques, and organizational best practices. More often than not, however, enterprises focus only on marketing a specific finished product—and completely eschew any effort to exploit the vast untapped potential of their intellectual property (patented, or otherwise). A classic example of this narrow vision to seeking revenue is the imaging and photographic equipment company, Eastman Kodak, which filed for bankruptcy protection in early 2012. In 1976, Kodak commanded 90% of film sales and 85% of camera sales in the U.S.—and due in large part to its complacency, the company made no substantive effort to exploit its vast treasure chest of IP assets. Ranging from its chemicals IP, and its assembly know-how, to its engineering training processes—Kodak could have potentially avoided bankruptcy if it had more effectively exploited its vast revenue potential of IP.

Know-how is not simply to be found within the enterprise itself, it is to be found within individual laborers. Conventionally, though, only the enterprise possesses the legal authority to manage and exploit intellectual property. In an entangled socio-economic paradigm, however, any and all employees—from the most senior executives to the assembly-line laborer—


would have the legal authority, even responsibility, to seek out and execute IP transactions in the name of the enterprise. This seemingly anarchic way of treating valuable IP (exploited, or not) may sound irresponsible and anti-corporate—but, in fact, would be an entirely responsible and wise way to disseminate know-how throughout the world at amazing speeds, while at the same time, assuring that know-how is perpetually valued by any and all parties (Figure 30).

FIGURE 30

Assume a common assembly-line laborer within a corporation possesses what might be considered unique know-how relating to, say, plastics manipulation. This assembly-line laborer happens to meet another assembly-line laborer from another entity, who expresses that this second entity has certain inefficiencies in how it manipulates plastics. Right then and there, in an entangled socio-economic paradigm, it would be beneficial to all parties (the two corporate entities as well as the two laborers) that the know-how possessed by the first laborer is transferred to the second laborer. With the recent maturing of ‘expert systems’,3 the IP transaction could easily be uploaded to a global network of expert systems via both laborer’s smartphone devices, and any improvements to the second entity’s revenue 3 An expert system is a computer application which makes decisions or solves problems in a particular field, by using knowledge and analytical rules defined by known human knowledge. People solve problems by using a combination of factual knowledge and reasoning. In an expert system, these two essentials are mimicked by two software components, a knowledge base and an inference engine. The knowledge base provides specific facts and rules about the subject, and the inference engine provides the reasoning ability that enables the expert system to form conclusions.

generation—as a consequence to this new IP—would result in a percentage of that new revenue generation to be remunerated to the first corporation as well as the laborers who initiated the transaction. In turn, the laborer from the second entity could transfer this same IP to still another laborer in a third entity (which, by the way, might have nothing at all to do with plastics, but something never before recognized about the IP relates to the needs of this third entity), and any resulting revenue generation would be remunerated back down the entire chain of participants. As an anarchic, yet

synchronistic consequence of spontaneous human relationships, not only can know-how be more widely dispersed throughout the marketplace, IP can still be protected, and now can be personally and exponentially valued by anyone, anywhere. By valuing not the sovereignty of a corporation, or even its intellectual property—but rather, by valuing our own human relationships and how IP can become an entangling agent—we can liberate from chains the very definition of ‘value’ itself.

As Figure 31 illustrates, multiple paradigms control how information is disseminated. Unfortunately, even though the internet has provided the world with a wildly effective process to disseminate information in a ‘distributed’ fashion, most economic actors still disseminate information in the archaic and hierarchical ‘centralized’ fashion. We still continue to be shackled by our egos telling us that we need to control our assets, rather than allowing nature’s magnet of potentiality to take us to places we can’t even imagine. Instead of pharmaceutical corporations attempting to covet and protect their investments, they could—in an


entangled socio-economic paradigm—invest the vast treasure chests of know-how they possess throughout the world, and reap an almost limitless value from the pharmaceutical and non-pharmaceutical fruits that would be borne by such investments. The ‘distributed’ model shown in Figure 31, then, corresponds to the visualization tool of the Brunnian link (Figs. 28, 29).

FIGURE 31

With only this brief example of how we might differently manage intellectual property, it should be a bit clearer that great untapped reservoirs of knowledge, know-how, experience, wisdom, and limitless potential are just waiting for us to explore. And as a consequence of exploring these infinite reservoirs, something odd begins to happen: instead of persistently existing isolated in our own bubbles of ‘order’ and ‘certainty’, spontaneous and unpredictable human relationships are forged, knowledge and wisdom are exchanged, new forces of economic activity are unleashed, and life seems to be a bit more human, a bit more empathic, and a bit more significant. In short, a seemingly anarchic and irresponsible way of disseminating IP can serve to unite us, sustain us, and even save us.

In the process of designing economic models for the nine-year case study of international development in Bosnia-Herzegovina (Hands & Brains Unbound, Byrnes, 2008), the objective of the case study economic model was to establish some quantifiable level of economic activity within 95% of the working-age population (in other words, a 5% unemployment rate). In essence, this ‘big bang’ approach was tantamount to establishing an economic vehicle that was inherently larger than Bosnia—and this big bang would be the stimulating event that pulled economic activity (and aggregate demand) into the marketplace. That meant that Brunnian linkages were to be mapped for the already existing pool of economic actors internal and external to Bosnia—which by the mere act of quantifying and mentoring these linkages, productivity within already existing economic activity would rise,

creating an almost immediate rise in levels of disposable income. This rise in economic activity, in turn and over time, would pull in even further economic actors and activity into the marketplace, until aggregate demand throughout the masses was eventually generated. The primary foundations of the Bosnia case study model included: Ѽ The Brunnian link model of socio-economic

entanglement; Ѽ Liberation of intellectual

property; Ѽ Establish equity-based (rather

than debt-based) partnerships between any and all possible economic actors; and Ѽ Establish a new definition

of the price-to-value model (explained just below).

Finally, to take this Brunnian link model of entanglement to its econometric conclusion in the Bosnia case study: the resulting socio-economic architecture of

Brunnian links and nodes would have an exponential impact on the generation of new wealth.

The result of the Bosnia case study model: a typical employee which began with an average annual salary of US$ 30,000, as a consequence of socio-economic entanglement, would generate US$ 611,867 in personal revenue. We extrapolate this staggering value to present world output, if socio-economic entanglement were to be implemented on a global scale (Figure 32).

FIGURE 32

The socio-economic entanglement and liberation of intellectual property, however, can only take us so far. We will need to also transform how humanity values value. In a consumer society, we value things—material


objects and how our egos are fed by these objects. But in a post-consumer society (the quaternary sector of wise exploration), we will value something else entirely: our own experiences, talents, potentiality, and relationships. We will also value nature herself.

iii. Transformation of valueHere, we discuss—and interweave—two particular

aspects of the transformation of value: Ѽ Shareholder value, and Ѽ Product/service value

In present-day capital markets, a publicly-traded corporation’s stock value is certainly not a rational quantification of the company’s essential value; the purchasing and selling of a company’s stock has degenerated into nothing more than mere casino speculation. Purchasers and sellers of stocks no longer are interested in the intrinsic value of a company, but rather, can they make profits simply by betting on or against any company or even industry.

In a paradigm of socio-economic interdependence, however, all economic actors—formal corporations, ad hoc collaborative networks, one-off ventures, etc.—operate so as to more fully enfranchise and diversify the issuance of shareholdings. Enfranchise in this way (similar to the liberation of intellectual property, as discussed above): economic actors which, say, provide services to a company on an ad hoc basis, can choose to be remunerated in company shares—which can be exchanged at any time for anything else of value, without the need to submit the transactions through a unnecessarily extraneous brokerage system. The exchange, however, is not consummated physically, but rather via online expert systems—which, in turn, dynamically value the shares considering multiple inputs (outlined just below).

Classical economics has suggested for centuries the more a product is consumed, production economies of scale allow the product to be produced in a manner that consistently lowers the cost of production. At the same time, consumers apply pressure to consistently lower the end-user purchase price—which stimulates even greater consumption. The long-term impact of this classical valuation process, however, is that no one along the innovation-to-consumption chain

directly shoulders the responsibilities of society (societal well-being, protection of the environment, etc.). Any thought or action of self-restraint has been relegated almost exclusively to the legal and regulatory systems.

Accordingly, so as to provide a facility for all economic actors to directly balance self-initiative with self-restraint, the valuation of goods and services is reversed in a socio-economic interdependent model. As Figure 33 illustrates, any single purchase of a good or service is no longer an unrestrained exchange of the product for a price specified by the seller. We illustrate three flows of activity.

Flow 1: The consumer is not simply a consumer of Product X—the entanglement process recognizes that any person, in one moment, might have contributed intellectual property to another venture, or in another moment, might have consumed a substantial quantity of Product Y. Consequently, depending on how ‘entangled’ the consumer might be, this becomes part of the final price-to-value determination.

Flow 2: Relating to product itself, the entanglement process calculates (a) total level of global consumption; (b) intrinsic value of global usefulness; and (c) intrinsic balance of market and social responsibility. These inputs are balanced with cost and profit inputs originating from the producing/selling entity. By interweaving these two flows, a more responsible econometric model to determine price-to-value can be established. In an entanglement process, the more a product is consumed on a global scale, the greater its value. In other words, if Product X was consumed by 25 percent of the global population, its value (consumer purchase price) might be US$ 1.00. However, if Product X was consumed by 75 percent of the global population, then its value (consumer purchase price) might be US$ 1.25. Thus, value is determined not by labor value, but instead, by a

FIGURE 33


visible socio-economic weighting process.Flow 3: Capital and futures markets become more

responsive to the moment-to-moment requirements of the market. This removes the incentive to misuse and manipulate capital and futures markets for financial speculation purposes. All global citizens are shareholders in corporations of their choosing. These consumer-shareholders, then, receive moment-to-moment dividend payments from each good/service consumed. The more which is consumed, the more wealth is generated for: Ѽ The producing/selling entity (formal corporations,

ad hoc collaborative networks, one-off ventures, etc.);

Ѽ The individual (receiving dividends); and Ѽ Societal well-being (via the enlightened utilization

of social responsibility valuations attached to each product).

This transformation of value quantification occurs as a consequence of humanity altering what specifically it consumes in the quaternary sector. If humanity chooses to embrace the vision of wise exploration of space, oceans, and land as it fourth horizon—then the specific consumption which occurs in this quaternary sector will, itself, possess honor. And humanity, in turn, will act, consume, and take responsibility for its actions with honor. It is too easy to discard a used fast-food package onto the street. It is more difficult to discard a human being which is teaching you how to breathe several thousand meters under the ocean. Since we, ourselves, become the economy, we transform what we value and how we quantify this value.

Thus, socio-economic interdependence achieves what classical economics thus far has not: (a) the intrinsic values of all individuals who contributed value to the innovation process throughout the entire production-consumption chain are quantified and secured; (b) the valuation of social responsibility in the production and consumption of goods/services are balanced into the valuation of wealth generation; and (c) aggregate demand is maintained as a direct consequence of society making an a priori and real time determination as to the direction and force of its economic activity and consequences.

iv. Liberation of money creation & supplyThe blogosphere debates regarding the fiat creation

of the money supply by the private banking system which were discussed earlier in this thesis, has provided an intriguing, if not radical, concept to explore. A tool of socio-economic interdependence which would essentially sever our centuries-old dependence upon debt to finance economic activity: the fiat creation of equity-centric money. Enterprises—established by anyone, anywhere—could possess the capacity to

create fiat money so as to increase the supply of money into the market, when needed (governed by specific regulations, of course). The argument can be made that since representative money was replaced by fiat money in 1971, money itself possesses no intrinsic value, other than being a unit of account or a medium of exchange. Money no longer possesses its historical definition as being a store of value. It can also be argued that an over-supply of money would not necessarily cause an adverse impact upon the fundamentals of the economy. Three specific adverse situations causing disequilibrium in the supply of money which have conventionally influenced monetary policy:

Situation 1: Liquidity trap. Initially described in Keynesian theory, a liquidity trap is a situation in which injections of cash into the private banking system by a central bank fail to lower interest rates and hence fail to stimulate economic growth. According to Keynes, it was the supply of money which caused fluctuations in interest rates provided by the private banking system to the market—and that interest rates provided the true stimulus for borrowing, consumption and investment. Critics of this theory suggest that money supply and corresponding interest rate fluctuations might play a stimulating role in cases where the markets required only a bit of ‘tweaking’. But pronounced liquidity traps occur primarily as a consequence of a failure in aggregate demand being generated; money supply is of negligible consequence. Indeed, since Keynes, historical events seem to contradict Keynes’ argument as to the true cause of a liquidity trap. In Japan, throughout the 1990s, and in the U.S., since 2008, central banks have attempted to stimulate the markets by both injecting new money into the system as well as lowering interest rates to or close to zero. But these ‘big gun’ monetary policies have had a negligible impact to stimulate the market back to expansion. Economist Paul Krugman has repeatedly argued since 2008 that the U.S., Europe, and Japan were in a liquidity trap. Krugman noted that the tripling of the U.S. monetary base between 2008 and 2011 failed to produce any significant effect on U.S. domestic price indices or dollar-denominated commodity prices. And as we have discussed earlier in this thesis, the shadow banking system presently possesses about US$ 60 trillion in assets—which, in large part, are intentionally not being invested in the primary, secondary, or tertiary economies. Having few market-driven opportunities in which to invest its capital resources—the SBS now plays with its over-supply of money in self-created speculation transactions. Thus, it could be argued that whether the fiat money supply is created by governments/central banks, private banks, or an equity-centric process, the money supply, itself, is not a cause of liquidity traps.

Situations 2 and 3: Interest rates & inflation-deflation. In a debt-centric money supply system, over-


and under-supply would certainly have an impact upon interest rates. But, if a socio-economic interdependent paradigm would eventually replace a debt-centric money supply with an equity-centric money supply, interest rates would no longer be of significance. Relating to inflation and deflation situations, economists have conventionally agreed that these situations are caused by an excessive fluctuation of the money supply. But again, modern market activity seems to confuse this issue. Conventional wisdom supports the notion that money, itself, has been a commodity which is valued as to its surplus or scarcity. This certainly was of import under a system of representative currency, but under a system of fiat currency, money, itself, is no longer a store of value. And as we have seen, the private banking system has easily created fiat money when the demand for loans required such money creation. In western markets, the vast over-supply of money that presently exists does not seem to impact, positively or negatively, rates of inflation. Indeed, modern market experience in China suggests, as a consequence of tight central-government controls on money supply, prolonged and aggressive growth in the domestic economy has indeed had an impact upon rates of inflation—and conversely, as China’s economy slowed as a consequence to reduced global demand, China’s money supply did have an impact upon inflation rates. It could be argued, then, a de-centralized infrastructure which manages fiat money supply actually is more capable of rapidly adjusting to shocks, and hence, adjusting the supply of money to generate equilibrium in the market. An open question which remains as a consequence of the present global economic crisis relates to the destruction of the money supply. Central banks have injected such a tremendous amount of new money into the system, that if and when governments simply can no longer sustain borrowing, nor even repay existing debt obligations—it is reasonable to assume that at some point the banking system may be forced to destroy the related debt instruments, and thus, the related money supply. It is important, then, if an equity-centric money supply system were to be established, much more detailed modeling should be conducted to study how equity-created money supply affects rates of inflation and deflation, as well as situations where money supply is required to be destroyed.

In a socio-economic interdependent paradigm as we have outlined in this thesis, all economic actors are entangled and sharing a fundamental objective to balance consumption output with the consequences of this output—as well as to better manage all required inputs, including money supply. Consequently, the essential aspects of under- or over-supply of money would be hypothetically manageable vis-à-vis a socio-economic interdependent paradigm. Furthermore, it can be argued that governments, over the past two decades,

may have essentially de facto vacated their monopoly hold over the creation of money. Most governments of today have amassed so much debt liability, that exercising their monopoly hold over money creation and supply management may be essentially untenable over the long term. Thus, it is at least hypothetically feasible that a globalized equity-centric fiat money system could be legally constructed.

In fact, today, there are over 4,000 privately issued currencies in more than 35 countries. These include commercial trade exchanges that use barter credits as units of exchange, private gold and silver exchanges, local paper money, computerized systems of credits and debits, and electronic currencies, such as Bitcoin (www.bitcoin.org). Again, as a consequence of internet-based expert systems, it is entirely possible for these types of privately issued currencies to be exchanged across the global markets, no matter where the currencies originated.

A last observation on this subject: by intentionally liberating money creation and supply, one very powerful consequence would result. Economic activity would no longer be arbitrarily or artificially confined to or controlled by select institutions (banks and governments). Thus, by extension, neither would economic activity be confined to or controlled by individual nations. Global markets would finally become exactly that: global. Humanity, seeking to join together in the quaternary sector of wise exploration, and utilizing such tools as an equity-centric fiat money supply, would finally establish for itself a stateless economy.

v. Connecting the dots: process & infrastructureThe most important aspect of envisioning an

infrastructure which can facilitate and sustain the dynamics and fluidity of socio-economic interdependence: process, not institution. An institution is constructed so as to protect some substance (say, central banks controlling the amount of currency circulating throughout the system). Process, on the other hand, is not inherently focused on controlling—only in facilitating. What circulates through a conventional bank is limited to currency and debt instruments. But what could circulate throughout a socio-economic interdependent ‘value exchange’, would have few, if any limitations. A transaction facilitated via an interdependent value exchange might include: an idea, book, music portfolio, span of highway, unused capacity of a manufacturing facility, corporation, fiat equity money, or even a community of people.

Thus, the process of how socio-economic interdependent dynamics is facilitated requires some ‘out of the box’ designing. Part internet skeleton, part software neural network, part human heart, and part unseen potentiality—an interdependent process infrastructure would be tantamount to a living multi-

www.bitcoin.org

www.bitcoin.org


dimensional organism. Figure 34 illustrates the overall concept of a process infrastructure which would facilitate global entanglement and interdependence.

FIGURE 34

Orthodox institutions are often both slow to respond and hesitant to anticipate. Figure 34 illustrates, however, a 3-dimensional ‘process and conduit’ network which is designed to anticipate and rapidly facilitate the global spread of knowledge and best practices. The globalized process network is the ‘macro’ side of the network, which includes components ranging from collaboration and aggregate demand facilitation, to social well-being and governance facilitation. Interconnecting each of the macro processes, are the resource conduits. These are ‘micro’ side of the network—bringing together and distributing any and all resources required to achieve socio-economic interdependence (ranging from technology and knowledge transfer to capital resources). The conduits are the connecting points by which local communities directly interface with any other community so as to collaborate on any given project. By constructing this conduits process for each community’s diverse and unique assets to be globalized, the uniqueness of individual skills and social cultures can be liberated from old market dependencies and geopolitical constraints, as well as past experiences of isolation and disenfranchisement.

Generally, each conduit is comprised of private individuals, small and large corporations, universities, government agencies, capital and natural resources, etc.—which all feed knowledge, information, technology, know-how, market necessities, etc. throughout the network of conduits. Based on experience gained from the Bosnia international development case study, as well as from studies of the post-World War II implementation of the Marshall Plan, extensive project management strategies have been developed by the authors and other organizations regarding the local-to-global rollout of a process and conduit network. For additional information regarding these project management strategies, please contact the authors of this thesis.

vi. The great unraveling & the bondingThe intentions of this thesis has not been to hold in

contempt the institutions of government or industry—but rather, to objectively observe that the economic crisis humanity is now experiencing can no longer be resolved by governments. The knowledge and objectives from which our traditional leaders operate is simply outdated and can no longer substantiate their futile efforts to lead us out of any crisis. The global crisis is so immense and interwoven, that no single government or coalition of governments can hope to resolve the labyrinthine problems that plague us all. It is now up to the masses themselves to join together and seek a fourth horizon—a new economy, a new world. And perhaps, this is as it should be. Societies have for too long abdicated their ‘natural responsibilities’ to elites which, in turn, have exploited the opportunity so freely provided to them. As ‘the system’ increasingly unravels, this may be the very time for the masses to finally awaken to their greater potentiality and duty.

The tools and processes to establish this fourth horizon either already exist, or can be brought into existence fairly quickly. Mass collaboration projects have continued to mature and expand into multiple frontiers of technology, society, and economics. Mass collaboration systems enlist a multitude of humans to help solve a wide variety of problems. Over the past decade, numerous such systems have appeared on the world-wide web, including Wikipedia, Linux, Yahoo! Answers, and Amazon’s Mechanical Turk—and a growing effort is being directed at developing more diverse platforms. In 2011, as an example, a small group of computer gamers on a site called Foldit (http://fold.it/portal/) solved the structure of a protein found in an AIDS-like monkey virus. The structure had confounded scientists for over a decade; the gamers, incredibly, cracked it in less than three weeks.

The challenge for mass collaboration, however, has been the majority of the platforms and uses of mass collaboration are narrowly focused to solve specific


problems, such as protein structures or software coding. The various separate collaborative networks have yet to integrate themselves into ‘meta-collaborative’ networks—where knowledge gained in one particular field can be applied in another unrelated field. Crowdsourcing platforms are increasingly being used for economic purposes, such as the IdeasProject (www.ideasproject.com)—sponsored by Nokia. One of the project’s initiatives: Microwork, where digital tasks (such as security camera footage monitoring and advertising copy editing, etc.) are crowdsourced to ‘microworkers’. Figure 35 illustrates the Microwork mobile phone application interface.

FIGURE 35

The price of personal use 3D printing technology (creating solid objects in a layering process called printing rather than the conventional assembly process) now ranges between US$ 500 and 4,000 (Figure 36). Sales of these personal use machines and kits have risen from only a few dozen in 2007 to nearly 24,000 units in 2011 (Wohlers Associates).

FIGURE 36

3D printing could very well be the global game changer to fully democratize and globalize the functions of fabrication and production. Imagine a city neighborhood or small village, where various individual citizens operate these home-based or even industrial-sized printing machines to print anything from automotive parts to furniture items. It is now possible for any individual on the planet to become a local-to-global production resource. In the very near future, even human tissue and food will be capable of being printed. Thingiverse (www.thingiverse.com) is a website dedicated to the sharing of user-created digital design files. New wealth is generated not simply from the 3D fabrication of a product, but also from designing and selling user-created digital design files. This is a tangible example of what was discussed earlier in this thesis regarding subsidiary value production and the multiplier effect (see Figure 17, page 19). A vital component of generating aggregate demand throughout the masses is enabling the masses to trade between themselves—not simply through a system of large corporations.

As a consequence of these and many other examples of tangible efforts for ‘non-top-down’ approaches to socio-economic activities—it is not inconceivable that with the appropriate support, these efforts can indeed thrive, mature, and multiply. Either as a consequence to the great unraveling now taking place, or simply because it is the right thing to do, a great bonding of humanity is indeed possible. As we further develop economic models of socio-economic interdependence, it may even be possible for all basic essentials for survival are provided for, a priori—via various instruments and processes of interdependence. Potential instruments include: (a) a percentage of each and every economic transaction might include a ‘survival essentials’ line-item, and (b) a portfolio of corporate shareholdings might be issued to each newborn, amongst other potential instruments. These are not welfare instruments in a conventional sense. In a socio-economic interdependence paradigm, it can be recognized that if society no longer has to worry about securing the basics for survival, then a more concerted effort can be made to contribute one’s deeper and authentic self to society at large. We have persistently adopted the worldview that a vast percentage of our economic activity should be directed toward the purchasing of shelter, food, and clothes. But we simply have not paused long enough to consider alternatives to this worldview which we have blindly adopted from some past generation.

Once humanity possesses some over-arching series of objectives which inherently pulls global collaboration into existence (such as the fourth horizon of wise exploration, or something similar), then individuals can seek their more authentic ‘callings’. As the economist-philosopher Ibn Khaldun observed a few centuries


ago: “the differences between peoples arise principally from the differences in their occupations; for their very union springs out of the need for co-operation in the securing of a livelihood.” Our very callings, our very occupations, when animated by the greater challenges of honor and inquiry, will instinctively grow to become interdependent with each other. In this way, we evolve into true stateless citizens. We become responsible. We become free.

Ethics & the massesIn 2008, an economics professor at a Midwest

U.S. university, having read an early draft of the socio-economic interdependence principles proffered in this thesis, disconsolately commented: “you are asking people to behave as saints.” And indeed, this is the very challenge facing any alternative to our present crisis-ridden economic paradigm. There are two obvious components to identifying and implementing any type of solution to such a global crisis as we now face: the technical component and the human component that is required to execute the technical component.

The conventional, realist, way in which societies tend to identify and apply solutions to any crisis is: (a) there is an immediate, almost instinctive reaction that the masses are neither capable nor willing to responsibly participate in the solution process; and (b) consequently, and conveniently, the elites attempt to carefully introduce some technical component so as to equally resolve the crisis whilst at the same preserving their positions of elite power. The utopian way, however, persistently operates from the view that it is the human ingredient, the human potential, which is what truly resolves any crisis. A realist view is based on any solution’s technical merits; a utopian view is based on the synthesis of the technical merits along with the enlightened participation of the masses in relation to the solution.

Indeed, in just the above section relating to mass collaboration, various studies and books can be found which caution that mass collaboration is nothing more than “utopianism” and “breathless hype” precisely because the masses are capable only of “mass mediocrity” (Harvard Business Review and Choice, 2007). Or this: ‘groupthink’ is the mode of thinking that happens when the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives. Group members try to minimize conflict and reach a consensus decision without critical evaluation of alternative ideas or viewpoints. The cost of groupthink is the loss of individual creativity, uniqueness, and independent thinking. Irving Janis (1972) defined groupthink as “a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when the members’ strivings for unanimity override their motivation to realistically appraise alternative

courses of action”. Paul Hart (1998) defined groupthink as “collective optimism and collective avoidance”.

Yet, even as this thesis of socio-economic interdependence may be viewed as utopian in the sense that it requires too much of the masses, we can only submit that humanity may soon be faced with no other choice. The litany of crises is familiar to us all; we need not catalogue them here, except for the following crisis which consistently is overlooked. Friedrich Schneider (2004) estimates the average size of the shadow economy ranges from 16 to 40 percent of a nation’s GDP (depending on the region). The estimated global annual value of the shadow economy is US$ 12.7 trillion. Extremely sophisticated global criminal networks have infiltrated almost every sector of the economy, including: counterfeit technology products, counterfeit pharmaceuticals, biological organs, transportation, illegal drugs, copyrighted material (video, music), intellectual property, identity theft, currency, prostitution, arms trafficking, booze cruises, and alcohol and tobacco. Perhaps equally disturbing is the fact that these extremely sophisticated global criminal networks are interwoven with, and sometimes indistinguishable from, institutions of government throughout the world. Robert Neuwirth (2011) estimates the underground economy generates 1.8 billion jobs, worldwide (total global employment in the formal economy is about 3 billion, ILO, 2011).

Considering just how severe and labyrinthine is our present global economic crisis, the ‘realist-based’ response has been superficially limited to only a minuscule grouping of technical components: cutting or raising taxes, cutting government spending, bailing-out more banks, writing more bank regulations, and advocating for more jobs for the middle-class—especially construction or even ‘eco-jobs’. We submit that the problems facing human civilization are now so severe, that ‘realist-based’ solutions can no longer be brought to bear in a manner which truly resolves the present global crisis. The only result possible of ‘realist-based’ solutions is the inescapable creation of a dystopia.

We submit that the only true solution to resolving the present global crisis is a utopian one. One way, or another, the masses will inevitably be required to fully undertake their ‘natural responsibilities’. It may certainly not be easy, nor pretty to observe. But, like anything that possesses life, a utopia will have to undergo its birthing process. Particularly in the field of economics, we have traditionally been forced to separate our pragmatic and realist economic intentions from our ethical and empathic societal intentions. We submit that by humanity undertaking a new journey into the quaternary sector of wise exploration, facilitated by a paradigm of socio-economic interdependence, the synthesis of these two heretofore separated intentions—economic and societal—may finally be possible.


ImplementationConventionally, when some new social or political

agenda is being promoted by a candidate to a position of power, the candidate earnestly proclaims to the voting public: “vote for me... I will lead you to a better life...”. This is because the candidate intends to remain true to the accepted ‘realist’ worldview to apply technical solutions to technical problems. But the utopian quaternary economy and interdependence agenda this thesis proposes cannot be proclaimed in these conventional terms. Indeed, what this thesis is essentially proclaiming: “vote for yourselves... you will lead yourselves and each other to a better life...”. This is the explicit challenge to implementing the establishment of a quaternary economy focused on wise exploration and its facilitating paradigm of socio-economic interdependence.

Implementing a new socio-economic paradigm which relied on the active and enlightened participation of the masses, would require the following three movements:

Ѽ Public education. As this thesis has argued, many of our government, business, and academic leaders who we regard as ‘experts’, are more likely than not to be operating from outdated doctrines of economics. That signifies that the masses, too, are likely to be operating from outdated knowledge. Consequently, it becomes imperative that a mass public education campaign be implemented so as to radically ‘update’ the public’s knowledge-base and discourse. Providing the world’s public with an inspiring vision of a quaternary economy and socio-economic interdependence would then pull into existence the next movement:

Ѽ Community-specific dialogue & design. Being better informed as to the flaws of our present economy, and being inspired to establish a fourth horizon for all of humanity—communities all around the world would come together to explore both their human and tangible opportunities and priorities particular to their community. Once each community has identified its general path forward into the quaternary economy, many communities will require collaboration with various other communities and resources so as to tangibly move into a new paradigm of socio-economic behavior. This collaborative requirement, then, will pull into existence the next movement:

Ѽ Collaborative implementation. Essentially, this is where the ‘process and conduit’ infrastructure as illustrated in Figure 34 (page 38) would be established. This infrastructure, then, would technically facilitate the human dynamics sought for in the previous dialoguing and design process. New ventures are begun. New resources are brought together. New experiences and relationships are

brought to life. New wealth is created. It is here, humanity steps into a new world of its own true making.

It should be noted that this thesis does not advocate any type of destruction of any existing economy. The vision being proffered here is simply to establish the quaternary ‘magnet’ which would then pull labor and resources into its environs. The overall economy will still possess agriculture and manufacturing. Services and shopping centers will still exist. The only true change is that consumption will no longer be the centerpiece of our existence. All the elements of economics become nothing more than pathways for humanity to explore and experience itself.

For additional information regarding these implementation strategies, please contact the authors of this thesis.

Conclusion

In the year 1348, if you were a traveler throughout Europe, you would likely kneel in awe at what

seemed to be the wrath of some biblical apocalypse: endless fields left uncultivated, cattle straying without herdsmen, barns and wine-cellars wide open, few humans to be seen anywhere. You would somehow sense the apparition of Black Death swirling in the air around you. What you might not be able to see in 1348, however, was that in just a few short years, laborers who had come back to cultivate the neglected fields, herd the cattle, and restock the wine-cellars, would be joyfully freed from their feudal lords, and earning substantially higher wages than before the pandemic. Indeed, the feudal lords, themselves, were also wealthier—they had inherited vast acreages of farmland and wealth from their kinsmen who had succumbed to pestilence. Death and destruction had led to freedom and wealth.

Throughout great swaths of the populations of our prosperous 21st Century, another kind of apocalypse seems to be casting its shadow. Fields of foreclosed homes stand uninhabited, retail stores gasp for breath and are left for dead, entire governments are laid bare to their impotence. But instead of some apparition dispatching entire communities of people to the statehood of death, the 21st Century is now home to over 7 billion human beings, and growing each day. All the while, as economies worsen, governments grow weaker, and societies of people grow less controllable. The people of 1348 would never come to know what it was that was killing them. It would not be until 1894 when the bacterium causing the bubonic plague would be identified. We in the 21st Century, however, can come to understand both why our economies are dying,


as well as what true solutions can be brought to bear and bring life to a new type of wealth.

This thesis has attempted to weave together into some coherent tapestry, a diverse palette of threads—economic and philosophical. Modern societies have blindly inherited so much from the past. We have simply come to take for granted that what we have inherited, were answers to different problems at different points along history. Those answers have become outdated and no longer apply to the problems of our affluent society in the 21st Century.

Adam Smith’s self-interested free markets and division of labor principles were answers to the problems of mass poverty and inefficiency in the embryonic days of industrialization. Edmund Burke’s honorable, yet elitist, aristocratic governance philosophies were answers to the problems facing monarchies across Europe and their tenuous relationships with other sovereigns. The affluent societies of today are challenged with different kinds of problems, and we also possess different kinds of strengths and opportunities as well. Relationships between socio-economic actors of today are severely more complex today than they were in a 1776 food market. Burke’s desire to protect governance from the chaos of democracy could not foresee the advent of the internet—where information could not only be more effectively distributed on a global scale, but also wisdom could be nurtured by and throughout the masses. Above all, an affluent society requires us to look beyond mere survival or self-gratification, and into the deeper reaches of our human capacity to transcend into a community of people abiding in interdependence.

Here we are, now, at the edge of a cliff. A vast body of humanity is suffering from massive upheavals to global economic markets. And the suffering is likely to grow even worse. A threat to global civil security is palpable. The global challenges are now so immense and so intertwined that the masses can no longer continue to simply wait and hope for some economic wonder-drug, or some political messiah to lead them by the hand. It now seems imperative that the masses finally rise up and claim both their ‘natural responsibilities’ as well as their ‘natural rights’.

Our affluent society needs an evolutionary kind of marketplace so as to thrive anew —a fourth quaternary economic paradigm. Giving life to the pioneer spirit abiding within us all, and the long-waiting potential of an enlightened existence—this will be our true and lasting prosperity. The journey of wise exploration will become a social and economic force greater than can be presently imagined.

The general horizon to where we journey, then, will tell us everything about what we produce as output. If we choose to explore the oceans, then submarines and perhaps communication translators allowing us to communicate directly with ocean life will be what

we produce. If we choose to explore the inner space of the quantum universe, then particle accelerators and virtual environments allowing us to see and interact with cancerous cells will be what we produce. If we choose to explore the far reaches of outer space, then more energy efficient space transportation vehicles and extreme-distance communications technologies will be what we produce.

Instead of laborers being pigeonholed to perform monotonous tasks that have been predetermined for them—the human species can contemplate some ineffable challenge in front of them, and seek deep within themselves for answers that will flood astonishment into their souls. Instead of teenagers spending the majority of their precious lives on this earth parading in shopping malls and seeking their self-worth in what brand of shoes they purchase—they can look upon, with awe, at the mysteries of the sea, and find limitless value within themselves. Instead of the elderly, infirm, and disabled being isolated away from society’s vision and responsibility—they can rejoin the rivers of life and provide us with wisdom, experience, and insight. Above and beyond the rational utility brought about by these transformations of the labor force, certainly, we can finally recognize that this is simply the right thing to do. This is our duty.

As we now stand at the edge of the cliff, and as we consider the potentialities of a quaternary economy and socio-economic interdependence, can our authentic occupations bring us together? Can we construct for ourselves an infrastructure and self-regulating process which enables us to become entangled with each other and co-create new sources of wealth? Can we save ourselves? The answers to these questions, as they always have, reside in the hearts and minds of all people. And in these hearts and minds, is where eternal wealth resides. Beyond any nation. Beyond all nations.

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Visit www.outoftheboxinsight.org or email [email protected]

for more information and documentation.

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Michael Byrnes served under three U.S. Administrations in an advisory capacity in designing

and implementing post-Cold War economic conversion strategies. In the corporate sector, he has counseled Fortune 100 companies as well as small businesses in matters of M&A strategy, crisis management, and change management.

Beginning in 1997, Michael switched gears and

relocated to Bosnia-Herzegovina for nine years-where he participated in various international development and nation-building projects. As a result, he wrote a seminal case study of the failures of international development, Hands & Brains Unbound: Revealing the Illusion of World Order and the Revolution Ascending. The case study not only drew attention to the systemic deficiencies of international development, but also revealed the fundamental weaknesses and potential opportunities in various states effectively participating in global economic markets.

Tamara van Halm is a consciousness guide and a specialist in facilitating group and program

dynamics. She is a former political affairs officer with the Defense Ministry, Netherlands, serving in the conflict-zone of Bosnia-Herzegovina (where she and Michael met). She has synthesized a number of modern techniques and tools centered on awakening and mastering authentic relationships in personal and

group environments.

Out of the Box Insight (www.outoftheboxinsight.org) provides individuals, groups, and communities with insight and tools to bring life to their authentic and significant potentiality.

We are committed to the evolutionary development of a quaternary economy, and its facilitating paradigm of socio-economic interdependence.

Lighting the way to a new order of the ages.

Documents

Wealth Beyond Nations - Novus Ordo · PDF fileWealth Beyond Nations 1 ... vehicle manufacturer, enjoys a US$ 32.6 billion annual ... 1 The U.S. consumer market (household final consumption